[2012] 4 S.C.R. 1 2 SUPREME COURT REPORTS [2012] 4 S.C.R ... · liabilities of the contractor in connection with discharge of his obligations, one will have to refer to clause 6 of

SUPREME COURT REPORTS [2012] 4 S.C.R.

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contractor had to bear all taxes, duties and other liabilitiesin connection with discharge of his obligations.

By Finance Act, 1997, the service tax was extendedto ‘handling contractor’. The service tax was brought intoforce w.e.f. 16.11.1997. Consequent thereto, the appellantdeducted service tax on the bills of the respondent forthe period 30.11.1997 to 6.8.1999. The respondent refusedto accept the deductions and raised a dispute forarbitration.

By Finance Act, 2000, an amendment was brought inwhereby ‘assessee’ would be the person who availed theservices and not the service provider.

The arbitrator dismissed the claim petition, holdingthat though the party who availed the service (appellantherein) was the ‘assessee’, in view of the agreement inclause 9.3 of the contract, it is contractual obligation ofthe claimant (respondent herein) to pay the service taxand the same was rightly deducted from the bills of theclaimant in terms of the contractual obligation.

Respondent filed arbitration petition. Single Judge ofHigh Court set aside the award holding that availer ofservice (appellant herein), as ‘assessee’ was liable to paythe tax. Appeal against the order was dismissed byDivision Bench of the High Court. Hence the presentappeal.

Allowing the appeal, the Court

HELD: 1. The respondent as the contractor had tobear the service tax under clause 9.3 as the liability inconnection with the discharge of his obligations underthe contract. The appellant could not be faulted fordeducting the service tax from the bills of the respondentunder clause 9.3, and there was no reason for the High

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RASHTRIYA ISPAT NIGAM LTD.v.

M/S. DEWAN CHAND RAM SARAN(Civil Appeal No. 3905 of 2012)

APRIL 25, 2012

[R.M. LODHA AND H.L. GOKHALE, JJ.]

Contract – Work contract – Payment of service tax –Liability of – Whether of the availer of service or the serviceprovider – Service availer deducting service tax from the billof the service provider – Dispute referred to arbitrator –Arbitrator holding that service tax was rightly deducted fromthe bills of the service provider in terms of the contractualobligation – In arbitration petition Single Judge of High Courtholding that availer of service was liable since it was theassessee – Order of Single Judge confirmed by DivisionBench of High Court – On appeal, held: Service providerunder contractual obligation was liable to pay the service tax– Availer of service became the assessee after amendmentby Finance Act 2000 – The liability arose out of the servicesrendered prior to 2000 amendment when the liability was onthe service provider – Even when the service availerbecomes liable to pay the service tax after 2000 amendment,there is no bar from entering into an agreement and passingon the tax liability on the service provider – Award of thearbitrator is upheld – Arbitration – Finance Act, 1994 – s. 65– Finance Act, 2000 – s. 116.

Doctrine/Principle – Doctrine of contra proferentem –Applicability of.

The appellant-manufacturer of steel products,appointed the respondent as the handling contractor fortransportation of its materials. The parties entered into acontract on 17.6.1998. Clause 9.3, thereof provided that


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4. If the clause 9.3 and the contract are read as awhole and various provisions thereof are harmonized,clause 9.3 will have to be held as containing thestipulation of the contractor accepting the liability to paythe service tax, since the liability did arise out of thedischarge of his obligations under the contract. It appearsthat the rationale behind clause 9.3 was that the petitioneras a Public Sector Undertaking should be therebyexposed only to a known and determined liability underthe contract, and all other risks regarding taxes arisingout of the obligations of the contractor are assumed bythe contractor. [Para 25] [20-C-E]

5. Service tax is an indirect tax, and it is possible thatit may be passed on. Therefore, an assessee cancertainly enter into a contract to shift its liability of servicetax. Though the appellant became the assessee due toamendment of 2000, his position is exactly the same asin respect of Sales Tax, where the seller is the assessee,and is liable to pay Sales Tax to the tax authorities, but itis open to the seller, under his contract with the buyer,to recover the Sales Tax from the buyer, and to pass onthe tax burden to him. Therefore, though there is nodifficulty in accepting that after the amendment of 2000the liability to pay the service tax is on the appellant asthe assessee, the liability arose out of the servicesrendered by the respondent to the appellant, and that tooprior to this amendment when the liability was on theservice provider. The provisions concerning service taxare relevant only as between the appellant as anassessee under the statute and the tax authorities. Thisstatutory provision can be of no relevance to determinethe rights and liabilities between the appellant and therespondent as agreed in the contract between two ofthem. There was nothing in law to prevent the appellantfrom entering into an agreement with the respondenthandling contractor that the burden of any tax arising out

RASHTRIYA ISPAT NIGAM LTD. v. DEWAN CHANDRAM SARAN

Court to interfere in the view taken by the arbitrator whichwas based, in any case on a possible interpretation ofclause 9.3. The Single Judge as well as the DivisionBench clearly erred in interfering with the award renderedby the arbitrator. The award made by the arbitrator isupheld. [Paras 30 and 31] [23-C-E]

2. If the evolution of the service tax law is seen,initially the liability to pay the service tax was on theservice provider, though it is now provided by theamendment of 2000 that the same is on the person whoavails of the service. The agreement between the partieswas entered into on 7.6.1998. The appellant had deducted5% service tax on the bills of the respondent for theperiod 30.11.1997 to 6.8.1999 which in fact it was requiredto deduct under the service tax law as it then stood.Subsequently, by the amendment of the definition ofassessee effected on 12.5.2000 (though retrospectivelyeffective from 16.7.1997) the liability to pay the service taxwas shifted to the person who was availing the serviceas the assessee. [Para 22] [18-G-H; 19-A-C]

3. Since clause 9.3 of the contract refers to theliabilities of the contractor in connection with dischargeof his obligations, one will have to refer to clause 6 of the“Terms and Conditions for Handling of Iron and SteelMaterials of RINL, VSP” which was an integral part of thecontract between the petitioner and the respondent, andwhich was titled “Obligations of the Contractor”. The saidparagraph 6 deals in great details with the work whichwas required to be done by the respondent as clearingand forwarding agent. It is therefore absolutely clear thatthe term “his obligations under this order” in clause 9.3of the contract denoted the contractor’s responsibilitiesunder clause 6 in relation to the work which he wasrequired to carry out as handling contractor. [Para 23] [19-D-F]


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of obligations of the respondent under the contractwould be borne by the respondent. It is conventional andaccepted commercial practice to shift such liability to thecontractor. [Paras 26 and 28] [20-E-H; 21-A-B, G]

Laghu Udyog Bharati vs. Union of India 1999 (6) SCC418: 1999 (3) SCR 1199; Numaligarh Refinery Ltd. vs.Daelim Industrial Co. Ltd. 2007 (8) SCC 466: 2007 (9) SCR724 – relied on.

6. Even, assuming that clause 9.3 was capable of twointerpretations, the view taken by the arbitrator was clearlya possible if not a plausible one. It is not possible to saythat the arbitrator had travelled outside his jurisdiction,or that the view taken by him was against the terms ofcontract. That being the position, the High Court had noreason to interfere with the award and substitute its viewin place of the interpretation accepted by the arbitrator.[Para 29] [22-C-D]

SAIL vs. Gupta Brother Steel Tubes Ltd. 2009 (10) SCC63: 2009 (14) SCR 253; Sumitomo Heavy Industries Ltd. vs.ONGC Ltd. 2010 (11) SCC 296 – relied on.

7. If clause 9.3 was to be read as meaning that therespondent would be liable only to honour his own taxliabilities, and not the liabilities arising out of theobligations under the contract, there was no need tomake such a provision in a bilateral commercialdocument executed by the parties, since the respondentwould be otherwise also liable for the same. A clause ina commercial contract is a bilateral document mutuallyagreed upon, and hence the principle of contraproferentem can have no application. Therefore, clause9.3 will have to be read as incorporated only with a viewto provide for contractor’s acceptance of the tax liabilityarising out of his obligations under the contract. [Para 27][21-C-F]

Bank of India vs. K. Mohan Das 2009 (5) SCC 313:2009 (5) SCR 118 – distinguished.

H.P. State Electricity Board vs. R.J. Shah 1999 (4) SCC214: 1999 (2) SCR 643; M/s Sudarsan Trading Co. vs. Govt.of Kerala 1989 (2) SCC 38: 1989 (1) SCR 665; GujaratAmbuja Cements Ltd. vs. Union of India 2005 (4) SCC 214:2000 (2) SCR 594 – referred to.

Case Law Reference:

1999 (2) SCR 643 Referred to. Para 16



1999 (3) SCR 1199 Relied on. Para 26

2009 (5) SCR 118 Distinguished. Para 27



2010 (11) SCC 296 Relied on. Para 29

CIVIL APPELLATE JURISDICTION : Civil Appeal No.3905 of 2012.

From the Judgment & Order dated 25.02.2008 of the HighCourt of Judicature at Bombay in Appeal No. 188 of 2006.

S. Ganesh, Pratap Venugopal, Surekha Raman, NamrataSood, Gaurav Nair, Varun Singh (for K.J. John & Co.) for theAppellant.

K.K. Rai, S.K. Pandey, Awanish Kumar, KrishnanandPandeya for the Respondent.

The Judgment of the Court was delivered by

H.L. GOKHALE J. 1. Leave granted.

RASHTRIYA ISPAT NIGAM LTD. v. DEWAN CHANDRAM SARAN


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2. This appeal is directed against the judgment and orderdated 25.2.2008 rendered by a Division Bench of the BombayHigh Court in Appeal No.188/2006 confirming the decision ofa single Judge of that court dated 4.7.2005 in ArbitrationPetition No.364/2004, whereby the High Court has set asidethe award dated 25.5.2004 passed by a sole arbitrator whichaward had dismissed the Claim Petition of the respondentagainst the appellant herein.

3. The questions involved in this appeal are two-fold, (i)firstly, whether under the relevant clause 9.3 of the terms andconditions of the contract between the parties, the appellant wasright in deducting the service tax from the bills of the respondentand, (ii) secondly, whether the interpretation of this clause andthe consequent award rendered by the arbitrator was againstthe terms of the contract and therefore illegal as held by theHigh Court, or whether the view taken by the arbitrator was apossible, if not a plausible view.

The contract and the relevant clause:

4. The appellant - a Govt. of India undertaking is engagedin the manufacture of steel products and pig-iron for sale in thedomestic and export markets. The respondent is a partnershipfirm carrying on the business of transportation of goods. In theyear 1997, the appellant appointed the respondent as thehandling contractor in respect of appellant's iron and steelmaterials from their stockyard at Kalamboli, Navi Mumbai. Aformal contract was entered into between the two of them on17.6.1998. 'Terms and conditions for handling of iron and steelmaterials' though recorded in a separate document, formed apart of this contract. Clause 9.0 of these terms and conditionswas concerning the payment of bills. Clause 9.3 thereof readas follows:-

"9.3. The Contractor shall bear and pay all taxes, dutiesand other liabilities in connection with discharge of hisobligations under this order. Any income tax or any other

taxes or duties which the company may be required by lawto deduct shall be deducted at source and the same shallbe paid to the Tax Authorities for the account of theContractor and the Company shall provide the Contractorwith required Tax Deduction Certificate."

Evolution of service tax:

5. Service Tax was introduced for the first time underChapter V of the Finance Act, 1994. Section 66 of the Act wasthe charging section and it provided for the levy of service taxat the rate of five per cent of the value of the taxable services."Taxable service" was defined in Section 65 to include onlythree services namely any service provided to an investor by astockbroker, to a subscriber by the telegraph authority, and toa policy-holder by an insurer carrying on general insurancebusiness. Section 68 required every person providing taxableservice to collect the service tax at specified rates. Section 69of the Finance Act, 1994 provided for registration of thepersons responsible for collecting service tax. Sub-sections (2)and (5) indicated that it was the provider of the service who wasresponsible for collecting the tax and obliged to get registered.

6. By the Finance Act, 1997 the first amendment toSection 65 of the Finance Act, 1994 was made, inter alia, byextending the meaning of "taxable service" from three servicesto 18 different services categorised in Section 65(41), sub-clauses (a) to (r). Sub-clause (j) made service to a client byclearing and forwarding agents in relation to clearing andforwarding operations, a taxable service. Similarly, service toa customer of a goods transport operator in relation to carriageof goods by road in a goods carriage was, by sub-clause (m),also included within the umbrella of taxable service. The phrases"clearing and forwarding agent" and "goods transport operator"were defined as follows:

"65. (10) 'clearing and forwarding agent' means anyperson who is engaged in providing any service, either

RASHTRIYA ISPAT NIGAM LTD. v. DEWAN CHANDRAM SARAN [H.L. GOKHALE, J.]


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directly or indirectly, connected with clearing and forwardingoperations in any manner to any other person and includesa consignment agent;

***

(17) 'goods transport operator' means any commercialconcern engaged in the transportation of goods but doesnot include a courier agency;"

7. The service tax was brought into force on 5.11.1997vide Notification No.44/77 with effect from 16.11.1997.Consequent thereupon, the appellant deducted 5% tax on thebills of the respondent for the period 30.11.1997 to 6.8.1999.The respondent, however, refused to accept the deductions,and raised a dispute for arbitration under clause 15 of the termsand conditions mentioned above. This dispute was referred forthe arbitration of a sole arbitrator, a retired Judge of the DelhiHigh Court.

8. Rules 2 (xii) and 2 (xvii) of the Service Tax Rules, 1994as amended in 1997 made the customers or clients of clearingand forwarding agents and of goods transport operators asassesses. These amended rules were challenged and wereheld ultra vires the Act by this Court in Laghu Udyog Bharativs. Union of India reported in 1999 (6) SCC 418. The Courtexamined the provisions of the Act and particularly Section 68and the definition of "person responsible for collecting theservice tax" in Section 65(28) and in terms held in paragraph9 that "the service tax is levied by reason of the services whichare offered. The imposition is on the person rendering service."

9. To overcome the law laid down in Laghu Udyog Bharati(supra), the Finance Act 2000 brought in an amendment on12.5.2000 (effective from 16.7.1997) in the manner indicatedin Section 116 which reads as follows:

"116. Amendment of Act 32 of 1994. - During the period

commencing on and from the 16th day of July, 1997 andending with the 16th day of October, 1998, the provisionsof Chapter V of the Finance Act, 1994 shall be deemedto have had effect subject to the following modifications,namely-

(a) in Section 65,-

(i) for clause (6), the following clause had been substituted,namely-

'(6) "assessee" means a person liable for collectingthe service tax and includes-

(i) his agent; or

(ii) in relation to services provided by a clearing andforwarding agent, every person who engages a clearingand forwarding agent and by whom remuneration orcommission (by whatever name called) is paid for suchservices to the said agent; or

(iii) in relation to services provided by a goodstransport operator, every person who pays or is liable topay the freight either himself or through his agent for thetransportation of goods by road in a goods carriage;'

(ii) after clause (18), the following clauses had beensubstituted, namely-

'(18-A) "goods carriage" has the meaning assignedto it in clause (14) of Section 2 of the Motor Vehicles Act,1988;

(18-B) "goods transport operator" means anycommercial concern engaged in the transportation ofgoods but does not include a courier agency;';

(iii) in clause (48), after sub-clause (m), the followingsub-clause had been inserted, namely-


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'(m-a) to a customer, by a goods transport operatorin relation to carriage of goods by road in a goodscarriage;';

(b) in Section 66, for sub-section (3), the followingsub-section had been substituted, namely-

'(3) On and from the 16th day of July, 1997, thereshall be levied a tax at the rate of five per cent of the valueof taxable services referred to in sub-clauses (g), (h), (i),(j), (k), (l), (m), (m-a), (n) and (o) of clause (48) of Section65 and collected in such manner as may be prescribed.';

(c) in Section 67, after clause (k), the following clause hadbeen inserted, namely-

'(k-a) in relation to service provided by goods transportoperator to a customer, shall be the gross amount chargedby such operator for services in relation to carrying goodsby road in a goods carriage and includes the freightcharges but does not include any insurance charges'."

Proceedings prior to this appeal:

10. The respondent contended before the learnedarbitrator that its dominant work was of transporting andforwarding of goods by road, and not of a handling contractor,and that the mere fact that it may be required to handle thegoods in a manner and to the extent provided in the contractbetween the parties, was merely incidental. The learnedarbitrator, however, noted that the contract between the partiesdated 17.6.1998 referred the respondent as the 'handlingcontractor', who shall undertake the job of handling iron andsteel materials at the yard of the company on the terms andconditions stipulated therein as also in the manner and in allrespects as mentioned in the contract. He referred to the noticeinviting tender, the declaration of particulars relating to thetender, the schedule of rates, the provision relating to scopeof work and the obligations of the contractor detailed in clause

6. In that connection, he referred to the letter dated 27.11.1997received from the office of Commissioner of Central Excise,Chennai wherein he had also held the work of the handlingcontractor as that of the clearing and forwarding agent liableto pay service tax. The arbitrator therefore held that therespondent was forwarding and clearing contractor.

11. Thereafter, he dealt with the question of liability to paythe service tax, and by a detailed award dated 25.5.2004rejected the contentions of the respondent and dismissed theClaim Petition. In the penultimate paragraph, the learnedarbitrator held as follows:-

"Clause 9.3 of the Tender Terms and Conditions of theContract, to my mind is clear & unambiguous. Thus it isthe Respondent who is the assessee. It is also true thatliability is of the Respondent to pay the tax. But then, underthe contract, under clause 9.3 to be more precise, it wasagreed that it would be the claimant who shall bear "alltaxes, duties and other liabilities" which accrue or becomepayable "In connection with the discharge of hisobligation." Service tax was one such tax/duty or a liabilitywhich was directly connected with "the discharge of hisobligation" as the clearing & forwarding agent. It is thiscontractual obligation which binds the claimant and thoughunder the law it is the respondent who is the assessee, itcan & rightly did deduct the service tax from the bills of theclaimant in terms of the said contractual obligation, thevalidity and legality of which has not been challengedbefore me."

12. This award led the respondent to file a petition underSection 34 of the Arbitration and Conciliation Act, 1996 beingArbitration Petition No.364/2004 before the High Court ofJudicature at Bombay. A Learned Single Judge of the HighCourt allowed that petition, and set aside the award with costsby judgment and order dated 4.7.2005. The learned Judgewhile arriving at that conclusion referred to the definition of the


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term "assessee" and held that insofar as service tax under theFinance Act, 1994 is concerned, the appellant as the assesseewas liable to pay the tax. The learned Judge observed asfollows:-

"The purpose of clause 9.3 is not to shift the burden oftaxes from the assessee who is liable under the law to paythe taxes to a person who is not liable to pay the taxesunder the law. In my opinion, the award therefore suffersfrom total non-application of mind and therefore, it isrequired to be set aside."

13. The appellant preferred an appeal to a Division Benchof Bombay High Court against the said judgment and order.The appeal was numbered as Appeal No. 188/2006. TheDivision Bench dismissed the appeal by holding as follows:

"16. ……..As noted, the Respondents are not "Assessee"under the Service Tax Act. The Appellants are, beingrecipients, resisted and have filed the return. It is, therefore,the appellant's obligation to pay the Service Tax and notthat of the Respondents, there is no specific clause thatsuch service tax, liability would be deductible from theamount payable by the Appellants to the Respondentpursuant to the contract in question. The deduction asclaimed and as directed by the award in absence of anyagreement or clause, therefore, is not correct."

14. Being aggrieved by the said judgment and order, thepresent appeal has been filed. Mr. S. Ganesh, learned SeniorCounsel has appeared for the appellant, and Mr. K.K. Rai,learned Senior Counsel has appeared for the respondent.

Submissions on behalf of the appellant:

15. As stated at the outset, the question involved beforethe arbitrator and in the offshoots therefrom, is with respect tointerpretation of the above referred clause No.9.3. Mr. Ganesh,

learned counsel for the appellant submitted that the entirepurpose in providing this clause was to provide that thecontractor will be responsible for the taxes, duties and theliabilities which would arise in connection with discharge of theobligations of the contractor. The obligations of the contractorwere laid down in clause 6.0 of the terms and conditions,referred to above. This clause provides the details ofcontractor's responsibility for clearance of the consignments ofthe appellant. The liability to pay the service tax arises out ofthe service provided by the respondent. There is no dispute thatin view of the above referred amendment of 2000, the appellantas the recipient of the service is the assessee under the servicetax law. However, there is no prohibition in the law againstshifting the burden of the tax liability. In the instant case, the taxliability will depend upon the value of the taxable serviceprovided by the respondent, and therefore clause 9.3 requiredthe respondent to take the burden. Mr. Ganesh cited theexample of sales tax which the assessee can shift to thecustomer. In his submission, the phrase, "liabilities inconnection with the discharge of his obligations" under thisclause will have to be construed in that context.

16. The learned counsel submitted that interpretation ofclause 9.3 by the arbitrator was the correct one, and in anycase, was a possible if not a plausible one. The Courts were,therefore, not expected to interfere therein. He submitted thatthe dispute in the present case was concerning theinterpretation of a term of the contract. It has been laid downby this Court that in such situations, even if one is of the viewthat the interpretation rendered by the arbitrator is erroneous,one is not expected to interfere therein if two views werepossible. Mr. Ganesh referred to the following observations ofthis Court in H.P. State Electricity Board vs. R.J. Shahreported in [1999 (4) SCC 214] at the end of paragraph 27,which are to the following effect:-

"27. ……..The dispute before the arbitrators,


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therefore, clearly related to the interpretation of the termsof the contract. The said contract was being read by theparties differently. The arbitrators were, therefore, clearlycalled upon to construe or interpret the terms of thecontract. The decision thereon, even if it be erroneous,cannot be said to be without jurisdiction. It cannot be saidthat the award showed that there was an error ofjurisdiction even though there may have been an error inthe exercise of jurisdiction by the arbitrators."

17. It was also submitted by the learned counsel that thecourt is not expected to substitute its evaluation of theconclusion of law or fact arrived at by the arbitrator and referredto the following observation in paragraph 31 in M/s SudarsanTrading Co. vs. Govt. of Kerala reported in [1989 (2) SCC 38].

"…………in the instant case the court had examinedthe different claims not to find out whether these claimswere within the disputes referable to the arbitrator, but tofind out whether in arriving at the decision, the arbitratorhad acted correctly or incorrectly. This, in our opinion, thecourt had no jurisdiction to do, namely, substitution of itsown evaluation of the conclusion of law or fact to come tothe conclusion that the arbitrator had acted contrary to thebargain between the parties.………."

Submissions on behalf of the respondent

18. Learned senior counsel for the respondent Mr. Rai, onthe other hand, submitted that the concerned clause cannot beread to imply a right to shift the tax liability. He submitted thatthe appellant was the assessee for the payment of service tax,and the concerned clause merely laid down that the contractorwill have to pay all taxes, duties and other liabilities which hewas otherwise required to pay if they arise in connection withdischarge of his obligations under the contract. The appellantwas entitled to deduct only the income tax and other taxes orduties which it was so required by law to deduct. The disputed

deductions would mean that the contractor had taken over thetax liability of the appellant as if the liability was on thecontractor. He referred to the judgment of this Court in GujaratAmbuja Cements Ltd. vs. Union of India reported in [2005 (4)SCC 214]. This judgment discusses the evolution of the servicetax as to how service tax was introduced by the Finance Act,1994, how the meaning of taxable service was extended in1997, and how the definition of assessee subsequently includedthe person who engages a clearing and forwarding agent, ora goods transport operator.

19. He drew our attention to paragraph 21 of GujaratAmbuja Cement Ltd. (supra) wherein this Court observed asfollows:

"21. As is apparent from Section 116 of the FinanceAct, 2000, all the material portions of the two sectionswhich were found to be incompatible with the Service TaxRules were themselves amended so that now in the bodyof the Act by virtue of the amendment to the word"assessee" in Section 65(5) and the amendment toSection 66(3), the liability to pay the tax is not on the personproviding the taxable service but, as far as the servicesprovided by clearing and forwarding agents and goodstransport operators are concerned, on the person whopays for the services. As far as Section 68(1-A) isconcerned by virtue of the proviso added in 2003, thepersons availing of the services of goods transportoperators or clearing and forwarding agents have explicitlybeen made liable to pay the service tax."

20. The respondent relied upon the judgment of this Courtin Bank of India vs. K. Mohan Das reported in [2009 (5) SCC313] by one of us (Lodha, J.). The issue in that matter was withrespect to the interpretation of some of the provisions of thevoluntary retirement scheme of 2000 of the appellant bank. Inparagraph 32 thereof this Court has observed as follows:-


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"….32. The fundamental position is that it is the banks whowere responsible for formulation of the terms in thecontractual Scheme that the optees of voluntary retirementunder that Scheme will be eligible to pension under thePension Regulation, 1995, and, therefore, they bear therisk of lack of clarity, if any. It is a well-known principle ofconstruction of a contract that if the terms applied by oneparty are unclear, an interpretation against that party ispreferred (verba chartarum fortius accipiuntur contraproferentem)."

Based on this paragraph, it was submitted that thearbitrator was bound to follow the principle of contraproferentem in the present case. It was contended that sincethe propounder of the contract was the petitioner in case ofvagueness, the rule of contra proferentem will have to beapplied in interpreting the present contract. Therefore, theliability to pay service tax was on the appellant as theassessee, and it could not be contended that under Clause 9.3that liability was accepted by the respondent. The judgment inBank of India (supra) was also pressed into service to submitthat clause 9.3 and the contract must be read as a whole, andan attempt should be made to harmonise the provisions.

21. It was submitted by the respondent that this Hon'bleCourt very succinctly summarised the legal principles for settingaside an award in SAIL vs. Gupta Brother Steel Tubes Ltd.(by one of us - Lodha J.) reported in [2009 (10) SCC 63] inparagraph 18 wherefrom principles (i) and (iv) would beattracted. As against that, the appellant stressed sub-paras (ii)& (vi) of the same paragraph 18. We may therefore quote theentire paragraph which reads as follows:-

"….18. It is not necessary to multiply the references.Suffice it to say that the legal position that emerges fromthe decisions o this Court can be summarised thus:

(i) In a case where an arbitrator travels beyond the

contract, the award would be without jurisdiction andwould amount to legal misconduct and because ofwhich the award would become amenable for beingset aside by a court.

(ii) An error relatable to interpretation of the contractby an arbitrator is an error within his jurisdiction andsuch error is not amenable to correction by courtsas such error is not an error on the face of theaward.

(iii) If a specific question of law is submitted to thearbitrator and he answers it, the fact that the answerinvolves an erroneous decision in point of law doesnot make the award bad on its face.

(iv) An award contrary to substantive provision of lawor against the terms of contract would be patentlyillegal."

(v) Where the parties have deliberately specified theamount of compensation in express terms, the partywho has suffered by such breach can only claim thesum specified in the contract and not in excessthereof. In other words, no award of compensationin case of breach of contract, if named or specifiedin the contract, could be awarded in excess thereof.

(vi) If the conclusion of the arbitrator is based on apossible view of the matter, the court should notinterfere with the award."

Consideration of the rival submissions:

22. We have noted the submissions of both the learnedcounsel. If we see the evolution of the service tax law, initiallythe liability to pay the service tax was on the service provider,though it is now provided by the amendment of 2000 that thesame is on the person who avails of the service. It is relevant


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to note that the agreement between the parties was enteredinto on 7.6.1998. The appellant had deducted 5% service taxon the bills of the respondent for the period 30.11.1997 to6.8.1999 which in fact it was required to deduct under theservice tax law as it then stood. Subsequently, by theamendment of the definition of assessee effected on 12.5.2000(though retrospectively effective from 16.7.1997) the liability topay the service tax was shifted to the person who was availingthe service as the assessee. We must note that it is thereafterthat the parties have gone for arbitration, and the respondenthas relied upon the changed definition of assessee to contendthat the tax liability was that of the appellant.

23. We are concerned with the question as to what wasthe intention of the parties when they entered into the contracton 7.6.1998, and how the particular clause 9.3 is to be read.Since clause 9.3 of the contract refers to the liabilities of thecontractor in connection with discharge of his obligations, onewill have to refer to clause 6 of the "Terms and Conditions forHandling of Iron and Steel Materials of RINL, VSP" which wasan integral part of the contract between the petitioner and therespondent, and which was titled "Obligations of theContractor". The said paragraph 6 deals in great details withthe work which was required to be done by the respondent asclearing and forwarding agent. It is therefore absolutely clearthat the term "his obligations under this order" in clause 9.3 ofthe contract denoted the contractor's responsibilities underclause 6 in relation to the work which he was required to carryout as handling contractor.

24. If we look into this clause 6.0, we find that theobligations of the contractor are defined and spelt out in minutedetails. Clause 6.0 is split into 33 sub-clauses, and it providesfor obligations of the contractor in various situations concerningthe clearance of consignments, and the services to be providedby the respondent as the handling contractor wherefrom the taxliability arises. The contractor is made responsible for

pilferage, any loss or misplacement of the consignments also.Clause 9.0 which deals with payment of bills, provides inclauses 9.1 and 9.2 that the bills will be prepared on the basisof the actual operations performed and the materials accountedon the basis of weight carried and received. Clause 9.3 has tobe seen on this background. The tax liability will depend uponthe value of the taxable service provided, which will varydepending upon the volume of the goods handled.

25. It was submitted on behalf of the respondent that clause9.3 and the contract must be read as a whole and one mustharmonise various provisions thereof. However, in fact whenthat is done as above, clause 9.3 will have to be held ascontaining the stipulation of the contractor accepting the liabilityto pay the service tax, since the liability did arise out of thedischarge of his obligations under the contract. It appears thatthe rationale behind clause 9.3 was that the petitioner as aPublic Sector Undertaking should be thereby exposed only toa known and determined liability under the contract, and allother risks regarding taxes arising out of the obligations of thecontractor are assumed by the contractor.

26. As far as the submission of shifting of tax liability isconcerned, as observed in paragraph 9 of Laghu UdyogBharati (Supra), service tax is an indirect tax, and it is possiblethat it may be passed on. Therefore, an assessee can certainlyenter into a contract to shift its liability of service tax. Thoughthe appellant became the assessee due to amendment of 2000,his position is exactly the same as in respect of Sales Tax,where the seller is the assessee, and is liable to pay Sales Taxto the tax authorities, but it is open to the seller, under hiscontract with the buyer, to recover the Sales Tax from the buyer,and to pass on the tax burden to him. Therefore, though thereis no difficulty in accepting that after the amendment of 2000the liability to pay the service tax is on the appellant as theassessee, the liability arose out of the services rendered by therespondent to the appellant, and that too prior to this


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amendment when the liability was on the service provider. Theprovisions concerning service tax are relevant only as betweenthe appellant as an assessee under the statute and the taxauthorities. This statutory provision can be of no relevance todetermine the rights and liabilities between the appellant andthe respondent as agreed in the contract between two of them.There was nothing in law to prevent the appellant from enteringinto an agreement with the respondent handling contractor thatthe burden of any tax arising out of obligations of the respondentunder the contract would be borne by the respondent.

27. If this clause was to be read as meaning that therespondent would be liable only to honour his own tax liabilities,and not the liabilities arising out of the obligations under thecontract, there was no need to make such a provision in abilateral commercial document executed by the parties, sincethe respondent would be otherwise also liable for the same. InBank of India (supra) one party viz. the bank was responsiblefor the formulation of the Voluntary Retirement Scheme, and theemployees had only to decide whether to opt for it or not, andthe principle of contra proferentem was applied. Unlike the VRSscheme, in the present case we are concerned with a clausein a commercial contract which is a bilateral document mutuallyagreed upon, and hence this principle can have no application.Therefore, clause 9.3 will have to be read as incorporated onlywith a view to provide for contractor's acceptance of the taxliability arising out of his obligations under the contract.

28. It was pointed out on behalf of the appellant that it isconventional and accepted commercial practice to shift suchliability to the contractor. A similar clause was considered bythis Court in the case of Numaligarh Refinery Ltd. vs. DaelimIndustrial Co. Ltd., reported in [2007 (8) SCC 466]. In thatmatter, the question was as to whether the contractor was liableto pay and bear the countervailing duty on the imports thoughthis duty came into force subsequent to the relevant contract.The relevant clause 2(b) read as follows:

"2(b) All taxes and duties in respect of job mentioned inthe aforesaid contracts shall be the entire responsibility ofthe contractor…"

Reading this clause and the connected documents, thisCourt held that they leave no manner of doubt that all thetaxes and levies shall be borne by the contractor includingthis countervailing duty.

29. In any case, assuming that clause 9.3 was capable oftwo interpretations, the view taken by the arbitrator was clearlya possible if not a plausible one. It is not possible to say thatthe arbitrator had travelled outside his jurisdiction, or that theview taken by him was against the terms of contract. That beingthe position, the High Court had no reason to interfere with theaward and substitute its view in place of the interpretationaccepted by the arbitrator. The legal position in this behalf hasbeen summarized in paragaph 18 of the judgment of this courtin SAIL vs. Gupta Brother Steel Tubes Ltd. (supra) and whichhas been referred to above. Similar view has been taken laterin Sumitomo Heavy Industries Ltd. vs. ONGC Ltd. reportedin [2010 (11) SCC 296] to which one of us (Gokhale J.) was aparty. The observations in paragraph 43 thereof are instructivein this behalf. This paragraph 43 reads as follows:

"43. ………The umpire has considered the fact situationand placed a construction on the clauses of the agreementwhich according to him was the correct one. One may atthe highest say that one would have preferred anotherconstruction of Clause 17.3 but that cannot make theaward in any way perverse. Nor can one substitute one'sown view in such a situation, in place of the one taken bythe umpire, which would amount to sitting in appeal. Asheld by this Court in Kwality Mfg. Corpn. v. CentralWarehousing Corpn*. The Court while consideringchallenge to arbitral award does not sit in appeal over thefindings and decision of the arbitrator, which is what theHigh Court has practically done in this matter. The umpire

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23RASHTRIYA ISPAT NIGAM LTD. v. DEWAN CHANDRAM SARAN [H.L. GOKHALE, J.]

is legitimately entitled to take the view which he holds tobe the correct one after considering the material beforehim and after interpreting the provisions of the agreement.If he does so, the decision of the umpire has to beaccepted as final and binding."

*[2009 (5) SCC 142]

30. In view of what is stated above, the respondent as thecontractor had to bear the service tax under clause 9.3 as theliability in connection with the discharge of his obligations underthe contract. The appellant could not be faulted for deductingthe service tax from the bills of the respondent under clause 9.3,and there was no reason for the High Court to interfere in theview taken by the arbitrator which was based, in any case ona possible interpretation of clause 9.3. The learned singleJudge as well as the Division Bench clearly erred in interferingwith the award rendered by the arbitrator. Both those judgmentswill, therefore, have to be set-aside.

31. Accordingly, the appeal is allowed and the impugnedjudgments of the learned Single Judge as well as of the DivisionBench, are hereby set aside. The award made by the arbitratoris upheld. The parties will bear their own costs.

K.K.T. Appeal allowed.

MEHRAWAL KHEWAJI TRUST (REGD.), FARIDKOT &ORS.

v.STATE OF PUNJAB & ORS.

(Civil Appeal No. 4005 of 2012)

APRIL 27, 2012

[P. SATHASIVAM AND J. CHELAMESWAR, JJ.]

Land Acquisition Act, 1894:

Compensation – Interest on solatium and additionalmarket value – Sale exemplars – Annual increase –Deduction – Held: When there are several exemplars withreference to similar lands, it is the general rule that thehighest of the exemplars, if it is satisfied that it is a bona fidetransaction, has to be considered and accepted – It is notdesirable to take an average of various sale deeds placedbefore the authority/court for fixing fair compensation – Saleexemplar being of 2½ years prior to s.4 Notification in theinstant case, annual increase is fixed at 12% - However, theexemplar being of a smaller plot, a 20% deduction will beallowed from the market value – Compensation awardedaccordingly – Claimant shall also be entitled to other statutorybenefits including interest on solatium and additional marketvalue.

The subject land admeasuring 33 acres, wasacquired in terms of Notification dated 22.12.1979 u/s 4of the Land Acquisition Act, 1894 (the Act). Dissatisfiedby the award dated 27.10.1982, passed by the Collector,the appellants filed an application for reference u/s 18 ofthe Act. The reference court enhanced the compensationto Rs.1,00,000/- per acre. The High Court declined tointerfere.

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[2012] 4 S.C.R. 24


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25 26MEHRAWAL KHEWAJI TRUST (REGD.), FARIDKOT& ORS. v. STATE OF PUNJAB

In the instant appeals, the appellants claimedcompensation in terms of higher exemplar, namely, Ext.A-61, instead of averaging the prices, and interest onsolatium.

Allowing the appeal, the Court

HELD: 1.1 The reference court failed to take note ofthe highest exemplar, namely, the sale transaction underExt. A-61 dated 22.07.1977. When the land is beingcompulsorily taken away from a person, he is entitled tothe highest value which similar land in the locality isshown to have fetched in a bona fide transaction enteredinto between a willing purchaser and a willing seller nearabout the time of the acquisition. When there are severalexemplars with reference to similar lands, it is the generalrule that the highest of the exemplars, if it is satisfied thatit is a bona fide transaction, has to be considered andaccepted. It is not desirable to take an average of varioussale deeds placed before the authority/court for fixing faircompensation. Therefore, the market value as per Ext.A-61 dated 22.07.1977 was Rs. 1,39,130.43 per acre (approx.Rs.1.40 lakhs per acre). The said sale deed was two anda half years prior in time than s. 4(1) notification dated22.12.1979. There is no reason to eschew the above saletransaction. It is also pointed out that the lands coveredunder Ext.A-61 are nearer to the lands of the appellantsunder acquisition. [para 12 and 15] [32-C-D]

Sri Rani M. Vijayalakshmamma Rao Bahadur, Raneeof Vuyyur vs. Collector of Madras, (1969) 1 MLJ 45 (SC);State of Punjab and Another vs. Hansraj (Dead) by LRS.Sohan Singh and Others, (1994) 5 SCC 734; Anjani MoluDessai vs. State of Goa and Another 2010 (14) SCR 997 =(2010) 13 SCC 710 – relied on.

1.2 This Court has time and again granted 10% to15% increase per annum. The annual increase is fixed at

12% per annum and with that rate of increase, the marketvalue of the appellants’ land would come to Rs.1,82,000per acre as on the date of notification. [para 16] [32-G; 33-C]

Ranjit Singh vs. Union Territory of Chandigarh (1992) 3SCC 659; Delhi Development Authority vs. Bali Ram Sharma& Ors. (2004) 6 SCC 533; ONGC Ltd. vs. RameshbhaiJivanbhai Patel 2008 (11) SCR 927 = (2008) 14 SCC 745;Union of India vs. Harpat Singh & Ors. (2009) 14 SCC 375 –relied on

1.3 The exemplar Ext.A-61 dated 22.07.1977 is quitereasonable and acceptable. However, considering thefact that the area of land under Ext. A-61 dated 22.07.1977is a smaller one, it is but proper that appropriatededuction should be made for the same. Thus, the marketvalue for the acquired land is fixed at Rs.1,82,000/- minusRs.36,400/- (towards 20% deduction) equivalent toRs.1,45,600/- rounded at Rs.1,45,000/- per acre which isquite fair, reasonable and acceptable. [para 17] [33-F, H;34-A]

Trishala Jain & Anr. vs. State of Uttaranchal & Anr., 2011(8) SCR 520 =2011 (6) SCC 47; State of Madhya Pradesh& Ors. vs. Kashiram (dead) by L.Rs. & Ors., 2010 (14) SCC506 and Prabhakar Raghunath Patil & Ors. vs. State ofMaharashtra, 2010 (13) SCR 586 = 2010 (13) SCC 107 –relied on.

2. The claimant is also entitled to get interest onsolatium and additional market value. [para 18] [34-B]

Sunder vs. Union of India, (2001) 7 SCC 211; GurpreetSingh vs. Union of India, (2006) 8 SCC 457 – followed.

State of Haryana vs. Kailashwati, AIR 1980 P&H 117 –referred to.


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Case Law Reference:

(1969) 1 MLJ 45 (SC) relied on para 12

(1994) 5 SCC 734 relied on para 12

2010 (14) SCR 997 relied on para 14





2011 (8 ) SCR 520 relied on para 17

2010 (14) SCC 506 relied on para 17

2010 (13 ) SCR 586 relied on para 17

(2001) 7 SCC 211 followed para 18

(2006) 8 SCC 457 followed para 18

AIR 1980 P&H 117 referred to para 18


From the Judgment & Order dated 06.01.2009 of the HighCourt of Punjab & Haryana at Chandigarh in R.F.A. No. 998 of1988 (O & M).

Dhruv Mehta, Bijoylashmi, Raghav Pandey, HemaShekhawat, Shobha for the Appellants.

T.S. Doabia, Vivek Goyal, AAG, Jagjit Singh Chhabra,Manindra Dubey, Ametesh Gaurav, Kuldip Singh for theRespondents.


P. SATHASIVAM, J. 1. Leave granted.

2. This appeal is directed against the final judgment andorder dated 06.01.2009 passed by the High Court of Punjaband Haryana at Chandigarh in R.F.A. No. 998 of 1988 (O&M)along with seven other appeals by which the High Courtdeclined to interfere with the order dated 11.02.1988 of theAdditional District Judge, Faridkot in L.R. No. 20 of 1984.

3. Brief facts:

(a) Colonel Sir Harindar Singh, since deceased, was theformer ruler of the State of Faridkot. In 1979, 259 Kanals and16 Marlas (33 acres) of land owned by him had been acquiredby the Punjab Government for extension of existing GrainMarket at Faridkot vide Notification No. 14(68)M-iv-78/17315dated 22.12.1979 under Section 4 of the Land AcquisitionAct,1894 (hereinafter referred to as "the Act") which waspublished in the Punjab Government Gazette. Notification underSection 6 of the Act was issued on 19.02.1982. The award bythe Collector was announced on 02.10.1982 and possessionof the land was also taken on that day. The Collector awardedcompensation at the rate of Rs.15,000/- per acre for Nehri land,Rs.10,000/- per acre for Barani land and Rs.25,000/- per acrefor Banjar Kadim land and Ghair Mumkin land. The totalcompensation awarded including solatium at 15% wasRs.4,85,202.86/-.

(b) Aggrieved by the award passed by the Collector, on27.10.1982, the appellants filed an application for referenceunder Section 18 of the Act. The Additional District Judge,Faridkot, by order dated 11.02.1988 in L.R. No. 20 of 1984disposed of the reference by enhancing the compensation toRs.1,00,000/- per acre.

(c) Against the aforesaid order, the appellants preferredR.F.A. No.998 of 1988 before the High Court. The High Court,by the impugned common order and judgment dated

MEHRAWAL KHEWAJI TRUST (REGD.), FARIDKOT& ORS. v. STATE OF PUNJAB


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29 30MEHRAWAL KHEWAJI TRUST (REGD.), FARIDKOT &ORS. v. STATE OF PUNJAB [P. SATHASIVAM, J.]

06.01.2009, declined to interfere with the order passed by theAdditional District Judge and did not enhance thecompensation as claimed by the appellants.

(d) Aggrieved by the order passed by the High Court, theappellants have filed this appeal by way of special leave beforethis Court.

4. Heard Mr. Dhruv Mehta, learned senior counsel for theappellants, Mr. Vivek Goyal, learned Additional AdvocateGeneral for the State of Punjab and Mr. T.S. Doabia, learnedsenior counsel for respondent No.2.

5. The only point for consideration in this appeal is whetherthe appellants have made out a case for higher compensationas claimed.

6. The materials placed before the Land AcquisitionCollector and the Reference Court show that the land is of greatpotential value inasmuch as the same being strategicallylocated at a commercial hub abutting main roads andsurrounded by commercial building including that of CanalColony, Godowns of Food Corporation of India, private andGovernment Residential Colonies, Red Cross Bhawan,Government Medical College, existing Grain Market andGodown of Warehousing Corporation. It was also pointed outthat one pocket of the land known as "Tikoni" is having mainroads on three sides.

7. In support of their claim for higher compensation, theappellants have relied upon various sale deeds in the referenceunder Section 18 of the Act. It was further seen that theReference Court discarded all the sale instances related to arealess than one kanal and proceeded to consider other saleinstances. It was pointed out that the State of Punjab did notchallenge the said criteria adopted by the Reference Court. Bypointing out the same, it was argued on the side of the

appellants that the exemplars for sale of one kanal or more areavailable to be relied upon.

8. The Reference Court has taken into consideration threesale exemplars which are Ext.A-48, Ext. A-52 and Ext.A-61. Itis the grievance of the appellants that in the place of relyingupon the highest exemplars, the Reference Court erroneouslydetermined the market price of the appellants land by averagingthe prices of all the three exemplars and thereby awarded acompensation of Rs. 1 lakh per acre. The High Court upheldthe said order of the Reference Court.

9. The appellants are aggrieved on two aspects, firstly thehighest exemplar, namely, Ext. A-61 should have been reliedupon in the place of averaging the prices and secondly, theReference Court did not grant interest on solatium.

10. The Reference Court held the following three saletransactions relied upon by the appellants as relevant fordetermination of the market value of the land in dispute:

Sale Deed Date Area Price(K-M) (Rs.K-M) (Rs./acre)

Ex. A-48 29.05.1979 3-4 31,000 77,500

Ex.A-52 20.03.1978 1- 5.25 19,000 1,21,600

Ex.A-61 22.07.1977 1-3 20,000 1,39,130

Considering all these transactions including other references,the Reference Court disposed of the matter by a common orderwhereby the compensation was enhanced to Rs.1,00,000/- peracre.

11. Since the measurements of the land under acquisition


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31 32MEHRAWAL KHEWAJI TRUST (REGD.), FARIDKOT &ORS. v. STATE OF PUNJAB [P. SATHASIVAM, J.]

are in kanals and marlas in the State of Punjab, the conversionof these units in acres and square yards is being set out asunder:

20 marlas = 1 kanal8 kanals = 1 acre160 marlas = 1 acre1 acre = 4840 sq. yds.1 kanal = 605 sq. yds.1 marla = 30.25 sq. yds.12. As pointed out above, the Reference Court failed to

take note of the highest exemplar, namely, the sale transactionunder Ext.A-61 dated 22.07.1977. In this regard, it is useful torefer the decision of this Court in Sri Rani M.Vijayalakshmamma Rao Bahadur, Ranee of Vuyyur vs.Collector of Madras, (1969) 1 MLJ 45 (SC). In this case, thisCourt has held thus:

"… where sale deeds pertaining to different transactionsare relied on behalf of the Government, that representingthe highest value should be preferred to the rest unlessthere are strong circumstances justifying a different course.In any case we see no reason why an average of two saledeeds should have been taken in this case."

13. In State of Punjab and Another vs. Hansraj (Dead)by LRS. Sohan Singh and Others, (1994) 5 SCC 734, thisCourt has held that method of working out the 'average price'paid under different sale transactions is not proper and that oneshould not have, ordinarily recourse to such method. This Courtfurther held that the bona fide sale transactions proximate tothe point of acquisition of the lands situated in theneighbourhood of the acquired lands are the real basis todetermine the market value.

14. This Court in Anjani Molu Dessai vs. State of Goa andAnother, (2010) 13 SCC 710, after relying upon the earlierdecisions of this Court in M. Vijayalakshmamma Rao

Bahadur (supra) and Hansraj (supra) held in para 20 as under:

"20. The legal position is that even where there are severalexemplars with reference to similar lands, usually thehighest of the exemplars, which is a bona fide transaction,will be considered."

Again, in para 23, it was held that "the averaging of the pricesunder the two sale deeds was not justified."

15. It is clear that when there are several exemplars withreference to similar lands, it is the general rule that the highestof the exemplars, if it is satisfied, that it is a bona fidetransaction has to be considered and accepted. When the landis being compulsorily taken away from a person, he is entitledto the highest value which similar land in the locality is shownto have fetched in a bona fide transaction entered into betweena willing purchaser and a willing seller near about the time ofthe acquisition. In our view, it seems to be only fair that wheresale deeds pertaining to different transactions are relied onbehalf of the Government, the transaction representing thehighest value should be preferred to the rest unless there arestrong circumstances justifying a different course. It is notdesirable to take an average of various sale deeds placedbefore the authority/court for fixing fair compensation.

16. Based on the above principles, the market value asper Ext.A-61 dated 22.07.1977 was Rs. 1,39,130.43 per acre(approx. Rs.1.40 lakhs per acre). The said sale deed was twoand a half years prior in time than Section 4(1) notification dated22.12.1979. There is no reason to eschew the above saletransaction. It is also pointed out that the lands covered underExt.A-61 are nearer to the lands of the appellants underacquisition. This Court has time and again granted 10% to15% increase per annum. In Ranjit Singh vs. Union Territoryof Chandigarh (1992) 3 SCC 659, this Court applied the ruleof 10% yearly increase for award of higher compensation. InDelhi Development Authority vs. Bali Ram Sharma & Ors.


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(2004) 6 SCC 533, this Court considered a batch of appealsand applied the rule of annual increase for grant of highercompensation. In ONGC Ltd. vs. Rameshbhai Jivanbhai Patel(2008) 14 SCC 745, this Court held that where the acquiredland is in urban/semi-urban areas, increase can be to the tuneof 10% to 15% per annum and if the acquired land is situatedin rural areas, increase can be between 5% to 7.5% per annum.In Union of India vs. Harpat Singh & Ors. (2009) 14 SCC 375,this Court applied the rule of 10% increase per annum. Basedon the above principle, we fix the annual increase at 12% perannum and with that rate of increase, the market value of theappellants' land would come to Rs.1,82,000 per acre as on thedate of notification.

17. Though the Reference Court relied on the saletransaction covered under Ex. A-48 dated 29.05.1979 and fixedcompensation @ Rs.1 lakh per acre inasmuch as under Ex. A-61 dated 22.07.1977, i.e., even two and a half years prior tonotification under Section 4(1) of the Act, the adjacent landshave fetched higher price and in the light of the principles laiddown in the above decisions, we are of the view that exemplarEx.A-61 dated 22.07.1977 is quite reasonable and acceptable.However, as rightly pointed out by the learned counsel forRespondent No.2 and considering the fact that the area of landunder Ex. A-61 dated 22.07.1977 is a smaller one, it is butproper that appropriate deduction should be made for the same.In Trishala Jain & Anr. vs. State of Uttaranchal & Anr., 2011(6) SCC 47, this Court has held that the value of sale of smallpieces of land can be taken into consideration for determiningthe value of large tract of land but with a rider that the Courtwhile taking such instances into consideration has to make areasonable deduction keeping in view of other attendantcircumstances. Similar view has been expressed in State ofMadhya Pradesh & Ors. vs. Kashiram (dead) by L.Rs. & Ors.,2010 (14) SCC 506 and Prabhakar Raghunath Patil & Ors.vs. State of Maharashtra, 2010 (13) SCC 107. In view of thesame, it would be just and reasonable to allow deduction @20%. By applying the above method, the market value for the

acquired land is fixed at Rs.1,82,000/- minus Rs.36,400/-(towards 20% deduction) equivalent to Rs.1,45,600/- roundedat Rs.1,45,000/- per acre which is quite fair, reasonable andacceptable.

18. The other grievance of the appellants is that intereston solatium and additional market value was not granted. Thisaspect has been considered and answered by the ConstitutionBench in the case of Sunder vs. Union of India, (2001) 7 SCC211. While considering various decisions of the High Courtsand approving the decision of the Punjab and Haryana HighCourt rendered in State of Haryana vs. Kailashwati, AIR 1980P&H 117, this Court held that the interest awardable underSection 28 would include within its ambit both the market valueand the statutory solatium. In view of the same, it is clear thatthe person entitled to the compensation awarded is alsoentitled to get interest on the aggregate amount includingsolatium. The above position has been further clarified by asubsequent Constitution Bench judgment in Gurpreet Singh vs.Union of India, (2006) 8 SCC 457. Based on the earlierConstitution Bench decision in Sunder (supra), the presentConstitution Bench held that the claimants would be entitled forinterest on solatium and additional market value if the awardof the Reference Court or that of the appellate Court does notspecifically refer to the question of interest on solatium andadditional market value or where the claim had not beenrejected either expressly or impliedly. In view of the same, wehold that the appellants are entitled to interest on solatium andadditional market value as held in the above referred twoConstitution Bench judgments.

19. In the light of the above discussion, the appellants havemade out a case for enhancement of compensation.Accordingly, the same is fixed at Rs.1,45,000/- per acre withall other statutory benefits including interest on solatium andadditional market value. The appeal is allowed to the extentmentioned above. No order as to costs.

R.P. Appeal allowed.


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[2012] 4 S.C.R. 35

AVISHEK GOENKAv.

UNION OF INDIA AND ANR.(Writ Petition (C) No. 265 of 2011)

APRIL 27, 2012

[S.H. KAPADIA, CJI, A.K. PATNAIK ANDSWATANTER KUMAR, JJ.]

Motor Vehicles Rules, 1989:

r.100 – Black films on safety glass of the windscreen andwindows of motor vehicle – Use of, permissibility – Held:Alteration to the conditions of the vehicle in a mannercontravening the Motor Vehicles Act is not permissible in law– r.100(2) provides that the glass of the windscreen and rearwindow of every motor vehicle shall be such and shall bemaintained in such a condition that VLT is not less than 70%and on side windows not less than 50% and would conformto Indian Standards [IS:2553-Part2-1992] – r.100 of the Rulesis a valid piece of legislation and is on the statute book – Oncesuch provision exists, directions cannot be issued contrary tothe provision of law – Thus, in face of the language of the Rule,the relief prayed for in the instant writ petition that there shouldbe 100% VLT cannot be granted – However, prayer relatingto issuance of directions prohibiting use of black films on theglasses of vehicles certainly has merit – On the plain readingof r.100, it is clear that car must have safety glass having VLTat the time of manufacturing 70% for windscreen and 50% forside windows – It should be so maintained in that conditionthereafter – The Rule and the explanation do not contemplateor give any leeway to the manufacturer or user of the vehicleto, in any manner, tamper with the VLT – The Rule and theIS only specify the VLT of the glass itself – If the glass somanufactured already has the VLT as specified, then thequestion of further reducing it by any means shall be in clear

violation of r.100 as well as the prescribed IS – Motor VehiclesAct, 1988 – ss.52, 53, 190.

r.100 – Interpretation of – Ban on use of black films onglass of the windscreen and windows of motor vehicle – Held:r.100 has to be interpreted in such a manner that it servesthe legislative intent and the object of framing such rules, inpreference to one which would frustrate the very purpose ofenacting the Rules as well as undermining the public safetyand interest – On the plain reading of r.100, it is clear that useof black films on the glasses of vehicles is prohibited – Suchuse of the black films have been proved to be criminal’sparadise and a social evil and has jeopardized the securityand safety interests of the State and public at large – If thecrimes can be reduced by enforcing the prohibition of law, itwould further the cause of Rule of Law and Public Interest aswell – The private interest would stand subordinate to publicgood – The Rules are mandatory and nobody has theauthority in law to mould these rules for the purposes ofconvenience or luxury and certainly not for crime –Interpretation of statutes.

Use of black films on vehicles of certain VIPs/VVIPs forsecurity reasons – Permissibility – Held: Although this practiceis not supported by law, as there is no notification by thecompetent authority giving exemption to such vehicles fromthe operation of r.100 or any of its provisions, the cases ofthe persons who have been provided with Z and Z+ securitycategory may be considered by a Committee consisting ofthe Director General of Police/Commissioner of Police of theconcerned State and the Home Secretary of that State/Centre– It will be for that Committee to examine such cases for grantof exemption in accordance with law and upon due applicationof mind – The appropriate government is free to make anyregulations that it may consider appropriate in this regard.

r.100 – Tinted glass and glass coated with black film –Distinction between.

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37 38AVISHEK GOENKA v. UNION OF INDIA AND ANR.

Act. In other words, alteration to the conditions of thevehicle in a manner contravening the Act is notpermissible in law. Section 52 of the Act declares that noowner of a motor vehicle shall so alter the vehicle thatthe particulars contained in the certificate of registrationare at variance with those originally specified by themanufacturer. However, certain changes are permissiblein terms of the proviso to this Section and that too withthe approval of the Central Government/competentauthority. In terms of Section 53 of the Act, if anyregistering authority or other prescribed authority hasreason to believe that any motor vehicle within itsjurisdiction is in such a condition that its use in a publicplace would constitute a danger to the public, or that itfails to comply with the requirements of the Act or theRules made thereunder, whether due to alteration ofvehicle violative of Section 52 of the Act or otherwise, theAuthority may, after giving opportunity of hearing,suspend the registration certificate for the periodrequired for rectification of such defect, and if the defectis still not removed, for cancellation of registration. Inexercise of its power, under various provisions of the Act,the Central Government has framed the Rules. ChapterV of the Rules deals with construction, equipment andmaintenance of motor vehicles. Rule 92 mandates that noperson shall use or cause or allow to be used in anypublic place any motor vehicle which does not complywith the provisions of this Chapter. There are differentRules which deal with various aspects of constructionand maintenance of vehicles including lights, brakes,gears and other aspects including overall dimensions ofthe vehicles. Rule 100 of the Rules concerns itself withthe glass of windscreen and VLT of light of such glasswindscreen. It specifically provides for fixation of glassesmade of laminated safety glass conforming to Indianstandards IS: 2553-Part 2 – 1992 and even for the kindof windscreen wipers required to be fixed on the front

The instant writ petition was filed seeking directionfor use of safety glasses on the windows/wind shields invehicles having 100% Visual Light Transmission (VLT)only and to that extent, the petitioner challenged thecorrectness of Rule 100 of the Motor Vehicles Rules,1989. The petitioner also prayed for prohibition on use ofblack films on the glasses of the vehicles, properimplementation of law in that behalf and finally, for takingstringent actions against the offenders, using vehicleswith black filmed glasses. He also prayed that a largerpolice force should be deputed to monitor such offences.

Partly allowing the writ petition, the Court

HELD: 1. The word ‘tinted’ means shade or hue asper the dictionary. The rear and front and side glassesof vehicles are provided with such shade or tint, andtherefore, they are widely referred to as ‘tinted glasses’,which is different from ‘black films’. The glasses of thevehicles having a coating of black films cannot be termedas ‘tinted glasses’ because they are not manufactured assuch. [Para 3] [45-B-C]

2. The Motor Vehicle Act, 1939 was enacted toconsolidate and amend the laws relating to motorvehicles. This Act was subjected to various amendments.Finally, the Motor Vehicles Act, 1988 was enacted, interalia, with the object and reason being to provide forquality standards for pollution control devices,provisions for issuing fitness certificate of the vehicleand effective ways of tracking down traffic offenders.Section 190 of the Act provides that any person whodrives or causes or allows to be driven in any publicplace a motor vehicle or a trailer which has any defect,or violates the standards prescribed in relation to roadsafety, or violates the provisions of the Act or the Rulesmade therein, is punishable as per the provisions of the


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screen of the vehicle. The Rules deal with every minutedetail of construction and maintenance of a vehicle. Inother words, the standards, sizes and specificationswhich the manufacturer of a vehicle is required to adhereto while manufacturing the vehicle are exhaustively dealtwith under the Rules. What is permitted has beenspecifically provided for and what has not beenspecifically stated would obviously be deemed to havebeen excluded from these Rules. It would neither bepermissible nor possible for the Court to read into thesestatutory provisions, what is not specifically provided for.These are the specifications which are in consonancewith the prescribed IS No. 2553-Part 2 of 1992 andnothing is ambiguous or uncertain. Rules 104, 104A, 119and 120 demonstrate the extent of minuteness in theRules and the efforts of the framers to ensure, not onlythe appropriate manner of construction and maintenanceof vehicle, but also the safety of other users of the road.[Paras 10-12] [47-A-H; 48-A-B; 49-E-H; 50-D]

4. Rule 100 provides for glass of windscreen andwindows of every motor vehicle. The glass used has tobe ‘safety glass’. Then it provides for the inner surfaceangle on the windscreen. Rule 100(2) provides that theglass of the windscreen and rear window of every motorvehicle shall be such and shall be maintained in such acondition that VLT is not less than 70 per cent and onside windows not less than 50 per cent and wouldconform to Indian Standards [IS:2553-Part2-1992]. Thesaid IS, under clause 5.1.7, deals with VLT standards andit provides for the same percentage of VLT through thesafety glass, as referred to in Rule 100(2) itself. In face ofthe language of the Rule, the relief prayed for that thereshould be 100 per cent VLT cannot be granted. Rule 100of the Rules is a valid piece of legislation and is on thestatute book. Once such provision exists, this Court

cannot issue directions contrary to the provision of law.However, the prayer relating to issuance of directionsprohibiting use of black films on the glasses of vehiclescertainly has merit. On the plain reading of the Rule, it isclear that car must have safety glass having VLT at thetime of manufacturing 70 per cent for windscreen and 50per cent for side windows. It should be so maintained inthat condition thereafter. In other words, the Rule notimpliedly, but specifically, prohibits alteration of such VLTby any means subsequent to its manufacturing. How andwhat will be a “safety glass” has been explained inExplanation to Rule 100. The Explanation while defining‘laminated safety glass’ makes it clear that two or morepieces of glass held together by an intervening layers ofplastic materials so that the glass is held together in theevent of impact. The Rule and the explanation do notcontemplate or give any leeway to the manufacturer oruser of the vehicle to, in any manner, tamper with the VLT.The Rule and the IS only specify the VLT of the glassitself. If the glass so manufactured already has the VLTas specified, then the question of further reducing it byany means shall be in clear violation of Rule 100 as wellas the prescribed IS. The Rule requires a manufacturerto manufacture the vehicles with safety glasses withprescribed VLT. It is the minimum percentage that hasbeen specified. The manufacturer may manufacturevehicle with a higher VLT to the prescribed limit or evena vehicle with tinted glasses, if such glasses do not fallshort of the minimum prescribed VLT in terms of Rule100. None can be permitted to create his own device tobring down the percentage of the VLT thereafter. Thus,on the plain reading of the Rule and the IS standards, useof black films of any density is impermissible. Anotheradverse aspect of use of black films is that even if theyreflect tolerable VLT in the day time, still in the night itwould clearly violate the prescribed VLT limits and would


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result in poor visibility, which again would beimpermissible. [Paras 13-18] [50-E-G; 51-B-H; 52-A-B]

6. Whatever are the rights of an individual, they areregulated and controlled by the statutory provisions ofthe Act and the Rules framed thereunder. The citizens atlarge have a right to life i.e. to live with dignity, freedomand safety. This right emerges from Article 21 of theConstitution of India. As opposed to this constitutionalmandate, a trivial individual protection or inconvenience,if any, must yield in favour of the larger public interest.The legislative intent attaching due significance to the‘public safety’ is evident from the object and reasons ofthe Act, the provisions of the Act and more particularly,the Rules framed thereunder. Rule 100 has to beinterpreted in such a manner that it serves the legislativeintent and the object of framing such rules, in preferenceto one which would frustrate the very purpose ofenacting the Rules as well as undermining the publicsafety and interest. Use of these black films have beenproved to be criminal’s paradise and a social evil. Thepetitioner rightly brought on record the unanimous viewof various police authorities right from the States ofCalcutta, Tamil Nadu and Delhi to the Ministry of HomeAffairs that use of black films on vehicles has jeopardizedthe security and safety interests of the State and publicat large. This certainly helps the criminals to escape fromthe eyes of the police and aids in commission of heinouscrimes like sexual assault on women, robberies,kidnapping, etc. If these crimes can be reduced byenforcing the prohibition of law, it would further the causeof Rule of Law and Public Interest as well. The privateinterest would stand subordinate to public good. In theinstant case as well, even if some individual interests arelikely to suffer, such individual or private interests mustgive in to the larger public interest. It is the duty of all

citizens to comply with the law. The Rules are mandatoryand nobody has the authority in law to mould these rulesfor the purposes of convenience or luxury and certainlynot for crime. [Paras 7, 19, 21] [46-B-C; 52-C-G; 53-E]

Hira Tikoo v. Union Territory of Chandigarh (2004) 6SCC 765: 2004(1) Suppl. SCR 65; Friends ColonyDevelopment Committee v. Stateof Orissa AIR 2005 SC 1 –relied on.

7. Rule 100(2) specifies the VLT percentage of theglasses at the time of manufacture and to be somaintained even thereafter. In Europe, Regulation No. 43of the Economic Commission for Europe of the UnitedNations (UN/ECE) and in Britain, the Road Vehicles(Construction and Use) Regulations, 1986, respectively,refer to the International Standard ISO 3538 on this issue,providing for VLT percentage of 70 and 75 per centrespectively. Use of black films or any other materialupon safety glass, windscreen and side windows isimpermissible. In terms of Rule 100(2), 70 per cent and50 per cent VLT standard are relatable to the manufactureof the safety glasses for the windshields (front and rear)and the side windows respectively. Use of films or anyother material upon the windscreen or the side windowsis impermissible in law. It is the VLT of the safety glasswithout any additional material being pasted upon thesafety glasses which must conform with manufacturespecifications. [Paras 22, 23] [53-H; 54-A-D]

8. Another issue raised in the instant writ petition wasregarding use of black films on vehicles of certain VIPs/VVIPs for security reasons. Even this practice is notsupported by law, as no notification by the competentauthority has been brought to court’s notice, givingexemption to such vehicles from the operation of Rule100 or any of its provisions. The cases of the personswho have been provided with Z and Z+ security category


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may be considered by a Committee consisting of theDirector General of Police/Commissioner of Police of theconcerned State and the Home Secretary of that State/Centre. It will be for that Committee to examine suchcases for grant of exemption in accordance with law andupon due application of mind. These certificates shouldbe provided only in relation to official cars of VIPs/VVIPs,depending upon the category of security that suchperson has been awarded by the competent authority.The appropriate government is free to make anyregulations that it may consider appropriate in thisregard. The competent officer of the traffic police or anyother authorized person shall challan such vehicles forviolating Rules 92 and 100 of the Rules with effect fromthe specified date and thereupon shall also remove theblack films from the offending vehicles. The manufacturerof the vehicle may manufacture the vehicles with tintedglasses which have Visual Light Transmission (VLT) ofsafety glasses windscreen (front and rear) as 70 per centVLT and side glasses as 40 per cent VLT, respectively.No black film or any other material can be pasted on thewindscreens and side glasses of a vehicle. For thereasons afore-stated, the use of black films of any VLTpercentage or any other material upon the safety glasses,windscreens (front and rear) and side glasses of allvehicles throughout the country is prohibited. The HomeSecretary, Director General/Commissioner of Police of therespective States/Centre shall ensure compliance withthis direction. The directions contained in this judgmentshall become operative and enforceable with effect from4th May, 2012. [Paras 24-27] [54-E-H; 55-A-E]

Case Law Reference:

2004 (1) Suppl. SCR 65 referred to Para 20

AIR 2005 SC 1 referred to Para 20

CIVIL ORIGINAL JURISDICTION : Writ Petition (Civil) No.265 of 2011.

Under Article 32 of the Constitution of India.

Avishek Goenka Petitioner-In-Person.

Gaurab Banerji, ASG, T.A. Khan, S.A. Haseeb, B.K.Prasad for the Respondents.


SWATANTER KUMAR, J. 1. Alarming rise in heinouscrimes like kidnapping, sexual assault on women and dacoityhave impinged upon the right to life and the right to live in asafe environment which are within the contours of Article 21 ofthe Constitution of India. One of the contributory factors to suchincrease is use of black films on windows/windshields of four-wheeled vehicles. The petitioner, as a public spirited person,has invoked the extraordinary jurisdiction of this Court underArticle 32 of the Constitution in the present public interestlitigation, praying for certain directions to stop this menace.According to the petitioner, this Court should issue a writ ordirection requiring use of such safety glasses on the windows/windshields in vehicles having 100 per cent Visual LightTransmission (for short ‘VLT’) only and, to that extent, thepetitioner challenges the correctness of Rule 100 of the MotorVehicles Rules, 1989 (for short “the Rules”). He also prays forprohibition on use of black films on the glasses of the vehicles,proper implementation of law in that behalf and finally, for takingstringent actions against the offenders, using vehicles withblack filmed glasses. He also prays that a larger police forceshould be deputed to monitor such offences.

2. The use of black films upon the vehicles gives immunityto the violators in committing a crime and is used as a tool ofcriminality, considerably increasing criminal activities. At times,heinous crimes like dacoity, rape, murder and even terroristacts are committed in or with the aid of vehicles having black


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45 46AVISHEK GOENKA v. UNION OF INDIA AND ANR.[SWATANTER KUMAR, J.]

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films pasted on the side windows and on the screens of thevehicles. It is stated that because of nonobservance of thenorms, regulations and guidelines relating to the specificationsfor the front and rear windscreens and the side windows of thevehicles, the offenders can move undetected in such vehiclesand commit crimes without hesitation.

3. The word ‘tinted’ means shade or hue as per thedictionary. The rear and front and side glasses of vehicles areprovided with such shade or tint, and therefore, they are widelyreferred to as ‘tinted glasses’, which is different from ‘blackfilms’. The glasses of the vehicles having a coating of blackfilms cannot be termed as ‘tinted glasses’ because they arenot manufactured as such.

4. Besides aiding in commission of crimes, black films onthe vehicles are also at times positively correlated with motoraccidents on the roads. It is for the reason that the comparativevisibility to that through normal/tinted glasses which aremanufactured as such is much lesser and the persons drivingat high speed, especially on highways, meet with accidentsbecause of use of black filmed glasses.

5. The use of black films also prevents the traffic policefrom seeing the activity in the car and communicating with thedriver of the vehicle. The petitioner also cites that the numberof fatal accidents of vehicles having black films is much higherin India than in other parts of the world. The black filmedvehicles have lower visibility and therefore, the chances ofaccident are increased by 18 per cent to 38 per cent due tolow visibility. He has also referred to the World HealthOrganization’s data, pertaining to deaths caused on roads,which, in India have crossed that of China, though the latter hasmore vehicles, population and area in comparison to India. Adevice called luxometer can measure the level of opaquenessin windows owing to the application of black films but this deviceis a scarce resource and is very scantily available with thepolice personnel in India.

6. The Court can take a judicial notice of the fact that evenas per the reports, maximum crimes are committed in suchvehicles and there has been a definite rise in the commissionof heinous crimes, posing a threat to security of individuals andthe State, both.

7. Whatever are the rights of an individual, they areregulated and controlled by the statutory provisions of the Actand the Rules framed thereunder. The citizens at large have aright to life i.e. to live with dignity, freedom and safety. This rightemerges from Article 21 of the Constitution of India. Asopposed to this constitutional mandate, a trivial individualprotection or inconvenience, if any, must yield in favour of thelarger public interest.

8. The petitioner claims to have received various repliesfrom the police department of different States like Tamil Nadu,West Bengal, Delhi and Ministry of Home Affairs, New Delhi.On the basis of the replies received under the provisions of theRight to Information Act, 2005, copies of which have beenannexed to the writ petition, it is averred that these authoritiesare of the unanimous opinion that black films should be banned.Black filmed glasses help in commission of crime as well ashiding the criminals even during vehicle checks at ‘Naka’points. Non-availability of electronic devices to measureviolations and lack of police force to enforce the Rules are alsoapparent from these replies. The petitioner also states that theuse of black films is not prevalent in developed and/ordeveloping countries all over the world. In fact, in some of thecountries, it is specifically banned. In Afghanistan, Belarus,Nigeria, Uganda and even in Pakistan, use of black films onthe vehicle glasses is banned. Use of black films is notprevalent in United States of America, United Kingdom,Germany and other countries as well.

9. In order to examine the merits of the prayers made bythe petitioner in the present application, it will be necessary forus to refer to the relevant laws.


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are different Rules which deals with various aspects ofconstruction and maintenance of vehicles including lights,brakes, gears and other aspects including overall dimensionsof the vehicles. Rule 100 of the Rules concerns itself with theglass of windscreen and VLT of light of such glass windscreen.It specifically provides for fixation of glasses made of laminatedsafety glass conforming to Indian standards IS:2553-Part 2 –1992 and even for the kind of windscreen wipers required tobe fixed on the front screen of the vehicle. Relevant part of Rule100, with which we are concerned, reads as under:-

“100. Safety glass.—(1) The glass of windscreens andthe windows of every motor vehicle 188[other thanagricultural tractors] shall be of safety glass:

Provided that in the case of three-wheelers and vehicleswith hood and side covers, the windows may be of189[acrylic or plastic transparent sheet.]

Explanation.—For the purpose of this rule,—

(i) "safety glass" means glass conforming to thespecifications of the Bureau of Indian Standards orany International Standards and so manufactured ortreated that if fractured, it does not fly or break intofragments capable of causing severe cuts;

(ii) any windscreen or window at the front of the vehicle,the inner surface of which is at an angle more thanthirty degrees to the longitudinal axis of the vehicleshall be deemed to face to the front.

[(2) The glass of the windscreen and rear window of everymotor vehicle shall be such and shall be maintained insuch a condition that the visual transmission of light is notless than 70%. The glasses used for side windows aresuch and shall be maintained in such condition that thevisual transmission of light is not less than 50%, and shallconform to Indian Standards [IS: 2553— Part 2—1992];

10. The Motor Vehicle Act, 1939 was enacted toconsolidate and amend the laws relating to motor vehicles. ThisAct was subjected to various amendments. Finally, the MotorVehicles Act, 1988 (for short ‘the Act’) was enacted, inter alia,with the object and reason being, to provide for qualitystandards for pollution control devices, provisions for issuingfitness certificate of the vehicle and effective ways of trackingdown traffic offenders. Section 190 of the Act provides that anyperson who drives or causes or allows to be driven in any publicplace a motor vehicle or a trailer which has any defect, orviolates the standards prescribed in relation to road safety, orviolates the provisions of the Act or the Rules made therein, ispunishable as per the provisions of the Act. In other words,alteration to the conditions of the vehicle in a mannercontravening the Act is not permissible in law. Section 52 ofthe Act declares that no owner of a motor vehicle shall so alterthe vehicle that the particulars contained in the certificate ofregistration are at variance with those originally specified bythe manufacturer. However, certain changes are permissible interms of the proviso to this Section and that too with the approvalof the Central Government/competent authority. In terms ofSection 53 of the Act, if any registering authority or otherprescribed authority has reason to believe that any motorvehicle within its jurisdiction is in such a condition that its usein a public place would constitute a danger to the public, or thatit fails to comply with the requirements of the Act or the Rulesmade thereunder, whether due to alteration of vehicle violativeof Section 52 of the Act or otherwise, the Authority may, aftergiving opportunity of hearing, suspend the registration certificatefor the period required for rectification of such defect, and if thedefect is still not removed, for cancellation of registration. Inexercise of its power, under various provisions of the Act, theCentral Government has framed the Rules. Chapter V of theRules deals with construction, equipment and maintenance ofmotor vehicles. Rule 92 mandates that no person shall use orcause or allow to be used in any public place any motor vehiclewhich does not comply with the provisions of this Chapter. There


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red reflectors, one each on both sides at their rear. Every motorcycle, shall be fitted with at least one red reflector at the rear.Rule 104A, provides that two white reflex in the front of thevehicle on each side and visible to on-coming vehicles from thefront at night. Rule 106 deals with deflections of lights andrequires that no lamp showing a light to the front shall be usedon any motor vehicle including construction equipment vehicleunless such lamp is so constructed, fitted and maintained thatthe beam of light emitted therefrom is permanently deflecteddownwards to such an extent that it is not capable of dazzlingany person whose eye position is at a distance of 8 metres fromthe front of lamp etc. Rules 119 and 120 specify the kind, sizeand manner in which the horn and silencer are to be fixed in avehicle.

12. These provisions demonstrate the extent of minutenessin the Rules and the efforts of the framers to ensure, not onlythe appropriate manner of construction and maintenance ofvehicle, but also the safety of other users of the road.

13. Rule 100 provides for glass of windscreen andwindows of every motor vehicle. The glass used has to be‘safety glass’. Then it provides for the inner surface angle onthe windscreen. Rule 100 (2) provides that the glass of thewindscreen and rear window of every motor vehicle shall besuch and shall be maintained in such a condition that VLT isnot less than 70 per cent and on side windows not less than50 per cent and would conform to Indian Standards [IS:2553-Part2-1992].

14. The said IS, under clause 5.1.7, deals with VLTstandards and it provides for the same percentage of VLTthrough the safety glass, as referred to in Rule 100(2) itself.

15. Having dealt with the relevant provisions of law, we mayalso refer to a statistical fact that the number of violators of Rule100 has gone up from 110 in the year 2008 to 1234 in the year

(3) The glass of the front windscreen of every motor vehicle[other than two wheelers and agricultural tractors]manufactured after three years from the coming into forceof the Central Motor Vehicles (Amendment) Rules, 1993shall be made of laminated safety glass:

Provided that on and from three months after thecommencement of the Central Motor Vehicles(Amendment) Rules, 1999, the glass of the frontwindscreen of every motor vehicle other than two-wheelersand agricultural tractors shall be made of laminated safetyglass conforming to the Indian Standards IS: 2553—Part2—1992.

Explanation.—For the purpose of these sub-rules"laminated safety glass" shall mean two or more piecesof glass held together by an intervening layer or layers ofplastic materials. The laminated safety glass will crack andbreak under sufficient impact, but the pieces of the glasstend to adhere to the plastic material and do not fly, and ifa hole is produced, the edges would be less jagged thanthey would be in the case of an ordinary glass.”

11. From the above provisions, it is clear that the Rulesdeal with every minute detail of construction and maintenanceof a vehicle. In other words, the standards, sizes andspecifications which the manufacturer of a vehicle is requiredto adhere to while manufacturing the vehicle are exhaustivelydealt with under the Rules. What is permitted has beenspecifically provided for and what has not been specificallystated would obviously be deemed to have been excluded fromthese Rules. It would neither be permissible nor possible forthe Court to read into these statutory provisions, what is notspecifically provided for. These are the specifications whichare in consonance with the prescribed IS No. 2553-Part 2 of1992 and nothing is ambiguous or uncertain. Let us take a fewexamples. Rule 104 requires that every motor vehicle, otherthan three wheelers and motor cycles shall be fitted with two


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or even a vehicle with tinted glasses, if such glasses do not fallshort of the minimum prescribed VLT in terms of Rule 100.None can be permitted to create his own device to bring downthe percentage of the VLT thereafter. Thus, on the plain readingof the Rule and the IS standards, use of black films of anydensity is impermissible. Another adverse aspect of use ofblack films is that even if they reflect tolerable VLT in the daytime, still in the night it would clearly violate the prescribed VLTlimits and would result in poor visibility, which again would beimpermissible.

19. The legislative intent attaching due significance to the‘public safety’ is evident from the object and reasons of the Act,the provisions of the Act and more particularly, the Rules framedthereunder. Even if we assume, for the sake of argument, thatRule 100 is capable of any interpretation, then this Court shouldgive it an interpretation which would serve the legislative intentand the object of framing such rules, in preference to one whichwould frustrate the very purpose of enacting the Rules as wellas undermining the public safety and interest. Use of theseblack films have been proved to be criminal’s paradise and asocial evil. The petitioner has rightly brought on record theunanimous view of various police authorities right from theStates of Calcutta, Tamil Nadu and Delhi to the Ministry ofHome Affairs that use of black films on vehicles hasjeopardized the security and safety interests of the State andpublic at large. This certainly helps the criminals to escape fromthe eyes of the police and aids in commission of heinous crimeslike sexual assault on women, robberies, kidnapping, etc. Ifthese crimes can be reduced by enforcing the prohibition oflaw, it would further the cause of Rule of Law and Public Interestas well.

20. This Court in the case of Hira Tikoo v. Union Territoryof Chandigarh [(2004) 6 SCC 765], while dealing with theprovisions of town planning and the land allotted to the allottees,upon which the allotees had made full payment, held that such

2010, in Delhi alone. This itself shows an increasing trend ofoffenders in this regard.

16. In face of the language of the Rule, we cannot grantthe petitioner the relief prayed for, that there should be 100 percent VLT. This Court cannot issue directions that vehiclesshould have glasses with 100 per cent VLT. Rule 100 of theRules is a valid piece of legislation and is on the statute book.Once such provision exists, this Court cannot issue directionscontrary to the provision of law. Thus, we decline to grant thisprayer to the petitioner.

17. However, the prayer relating to issuance of directionsprohibiting use of black films on the glasses of vehicles certainlyhas merit. On the plain reading of the Rule, it is clear that carmust have safety glass having VLT at the time of manufacturing70 per cent for windscreen and 50 per cent for side windows.It should be so maintained in that condition thereafter. In otherwords, the Rule not impliedly, but specifically, prohibitsalteration of such VLT by any means subsequent to itsmanufacturing. How and what will be a “safety glass” has beenexplained in Explanation to Rule 100. The Explanation whiledefining ‘laminated safety glass’ makes it clear that two or morepieces of glass held together by an intervening layers of plasticmaterials so that the glass is held together in the event ofimpact. The Rule and the explanation do not contemplate orgive any leeway to the manufacturer or user of the vehicle to,in any manner, tamper with the VLT. The Rule and the IS onlyspecify the VLT of the glass itself.

18. Two scenarios must be examined. First, if the glassso manufactured already has the VLT as specified, then thequestion of further reducing it by any means shall be in clearviolation of Rule 100 as well as the prescribed IS. Secondly,the rule requires a manufacturer to manufacture the vehicleswith safety glasses with prescribed VLT. It is the minimumpercentage that has been specified. The manufacturer maymanufacture vehicle with a higher VLT to the prescribed limit


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allotment was found to be contravening other statutoryprovisions and the allotted area was situated under thereserved forest land and land in periphery of 900 meters of AirForce Base. The Court held that there was no vested right andpublic welfare should prevail as the highest law. Thus, thisCourt, while relying upon the maxim “salus populi est supremalex”, modified the order of the High Court holding that theallottees had no vested right and the land forming part of theforest area could not be taken away for other purposes.Reference can also be made to the judgment of this Court inFriends Colony Development Committee v. State of Orissa[AIR 2005 SC 1], where this Court, while referring toconstruction activity violative of the regulations and controlorders, held that the regulations made under OrissaDevelopment Authorities Act, 1982 may meddle with privaterights but still they cannot be termed arbitrary or unreasonable.The private interest would stand subordinate to public good.

21. In the present case as well, even if some individualinterests are likely to suffer, such individual or private interestsmust give in to the larger public interest. It is the duty of allcitizens to comply with the law. The Rules are mandatory andnobody has the authority in law to mould these rules for thepurposes of convenience or luxury and certainly not for crime.We may also note that a Bench of this Court, vide its Orderdated 15 th December, 1998 in Civil Appeal No. 3700 of 1999titled Chandigarh Administration and Others v. Namit Kumar& Ors., had permitted the use of ‘light coloured tinted glasses’only while specifically disapproving use of films on the vehicles.Subsequently, in the same case, but on a different date, anotherBench of this Court vide its order reported at [(2004) 8 SCC446] made a direction that mandate of sub-Rule (2) of Rule 100shall be kept in mind while dealing with such cases.

22. Rightly so, none of the orders of this Court havepermitted use of black films. Rule 100(2) specifies the VLTpercentage of the glasses at the time of manufacture and to

be so maintained even thereafter. In Europe, Regulation No.43 of the Economic Commission for Europe of the UnitedNations (UN/ECE) and in Britain, the Road Vehicles(Construction and Use) Regulations, 1986, respectively, referto the International Standard ISO 3538 on this issue, providingfor VLT percentage of 70 and 75 per cent respectively.

23. In light of the above discussion, we have no hesitationin holding that use of black films or any other material uponsafety glass, windscreen and side windows is impermissible.In terms of Rule 100(2), 70 per cent and 50 per cent VLTstandard are relatable to the manufacture of the safety glassesfor the windshields (front and rear) and the side windowsrespectively. Use of films or any other material upon thewindscreen or the side windows is impermissible in law. It isthe VLT of the safety glass without any additional material beingpasted upon the safety glasses which must conform withmanufacture specifications.

24. Another issue that has been raised in the present WritPetition is that certain VIPs/VVIPs are using black films on theirvehicles for security reasons. Even this practice is notsupported by law, as no notification by the competent authorityhas been brought to our notice, giving exemption to suchvehicles from the operation of Rule 100 or any of its provisions.Be that as it may, we do not wish to enter upon the arena ofthe security and safety measures when the police departmentand Home Ministry consider such exemption appropriate. Thecases of the persons who have been provided with Z and Z+security category may be considered by a Committeeconsisting of the Director General of Police/Commissioner ofPolice of the concerned State and the Home Secretary of thatState/Centre. It will be for that Committee to examine suchcases for grant of exemption in accordance with law and upondue application of mind. These certificates should be providedonly in relation to official cars of VIPs/VVIPs, depending uponthe category of security that such person has been awarded

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by the competent authority. The appropriate government is freeto make any regulations that it may consider appropriate in thisregard.

25. The competent officer of the traffic police or any otherauthorized person shall challan such vehicles for violating Rules92 and 100 of the Rules with effect from the specified date andthereupon shall also remove the black films from the offendingvehicles.

26. The manufacturer of the vehicle may manufacture thevehicles with t inted glasses which have Visual LightTransmission (VLT) of safety glasses windscreen (front andrear) as 70 per cent VLT and side glasses as 40 per cent VLT,respectively. No black film or any other material can be pastedon the windscreens and side glasses of a vehicle.

27. For the reasons afore-stated, we prohibit the use ofblack films of any VLT percentage or any other material uponthe safety glasses, windscreens (front and rear) and sideglasses of all vehicles throughout the country. The HomeSecretary, Director General/Commissioner of Police of therespective States/Centre shall ensure compliance with thisdirection. The directions contained in this judgment shallbecome operative and enforceable with effect from 4th May,2012.

28. With the above directions, we partially allow this writpetition and prohibit use of black films of any percentage VLTupon the safety glasses, windscreens (front and rear) and sideglasses. However, there shall be no order as to costs.

D.G. Writ Petition partly allowed.

P.A. MOHAMMED RIYASv.

M.K. RAGHAVAN & ORS.(Civil Appeal No. 10262 of 2010)

APRIL 27, 2012

[ALTAMAS KABIR AND J. CHELAMESWAR, JJ.]

Representation of the People Act, 1951 – s. 83(1) provisoand s. 81 r/w ss. 100, 101 and 123 – Election petition allegingcorrupt practice – Maintainability of – In absence of affidavitin Form 25 as required under s. 83(1) r/w. r. 94A of Conductof Election Rules – Held: In the absence of proper verificationas contemplated in s. 83, cause of action cannot be said tobe complete – Thus the petition is not maintainable – In acase where proviso to s. 83(1) was attracted, a single affidavitwould not be sufficient and two affidavits would be requiredone under Or. VI r. 15(4) CPC and the other in Form 25 –Conduct of Election Rules, 1961 – r. 94A – Code of CivilProcedure, 1908 – Or. VI r. 15 (4).

The question for consideration in the present appealwas whether an election petition u/s. 81 r/w ss. 100, 101and 123 of Representation of the People Act, 1951 is notmaintainable for want of complete cause of action inabsence of the requisite affidavit in Form 25 as requiredunder proviso to s. 83(1) of the Act r/w r. 94A of theConduct of Election Rules, 1961.

Dismissing the appeal, the Court

HELD: 1. As is evident from Section 83 ofRepresentation of the People Act, 1951, the electionpetitioner is required to set forth full particulars of anycorrupt practice that he alleges and the names of theparties involved therein and it further provides that the

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4. In the absence of proper verification, ascontemplated in Section 83, it cannot be said that thecause of action was complete. The consequences ofSection 86 of the Act come into play immediately in viewof Sub-Section (1) which relates to trial of electionpetitions and provides that the High Court shall dismissthe election petition which does not comply with theprovisions of Section 81 or Section 82 or Section 117 ofthe Act. Although, Section 83 has not been mentioned inSub-Section (1) of Section 86, in the absence of properverification, it must be held that the provisions of Section81 had also not been fulfilled and the cause of action forthe Election Petition remained incomplete. The Petitionerhad the opportunity of curing the defect, but it chose notto do so. [Para 26] [73-D-F]

Hardwari Lal vs. Kanwal Singh (1972) 1 SCC 214: 1972(3) SCR742; M. Kamalam vs. Dr. V. A. Syed Mohammed1978 (2) SCC 659: 1978(3) SCR 446; R.P. Moidutty vs.P.T. Kunju Mohammad and Anr. (2000) 1 SCC 481; V.Narayanaswamy vs. C.P.Thirunavukkarasu (2000) 2 SCC294: 2000 (1) SCR 292; RavinderSingh vs. Janmeja Singhand Ors. 2000) 8 SCC 191: 2000 (3) Suppl. SCR 331; AzharHussain vs. Rajiv Gandhi 1986 Supp SCC 315;Samant N.Balkrishna and Anr. vs. George Fernandez and Ors. (1969)3 SCC 238: 1969 (3) SCR 603; Dhartipakar Madan LalAgarwal vs. RajivGandhi (1987) Supp SCC 93; AnilVasudev Salgaonkar vs. NareshKushali Shigaonkar (2009)9 SCC 310: 2009 (14) SCR 10; Dev Kanta Barooah vs. GolokChandra Baruahand Ors.(1970) 1 SCC 392: 1970 (3) SCR662 – relied on.

Murarka Radhey Shyam Ram Kumar vs. Roop SinghRathore and Ors. AIR 1964 SC 1545: 1964 SCR 573; F.A.Sapa and Ors. vs. Singora and Ors. (1991) 3 SCC 375: 1991(2) SCR 752; Sardar Harcharan Singh Brar vs. SukhDarshan Singh and Ors. (2004) 11 SCC 196: 2004 (5) Suppl.SCR 682; K.K. Ramachandran Master vs. M.V.

same is to be signed by the petitioner and verified in themanner laid down in CPC for the verification ofproceedings. The proviso makes it clear that where theelection petitioner alleges any corrupt practice, thepetition shall also be accompanied by an affidavit in theprescribed form in support of the allegation of suchcorrupt practice and the particulars thereof and theschedule or annexures to the petition shall also be signedby the petitioner and verified in the same manner as thepetition. In other words, when corrupt practices arealleged in an election petition, the source of suchallegations has to be disclosed and the same has to besupported by an affidavit in support thereof. [Para 23] [71-F-H; 72-A]

2. In the present case, although allegations as tocorrupt practices alleged to have been employed by therespondent had been mentioned in the body of thepetition, the petition itself had not been verified in themanner specified in Or. VI r. 15 CPC. Sub-Section (4) ofSection 123 of the Act defines “corrupt practice” and thepublication of various statements against the respondentwhich were not supported by affidavit, could not,therefore, have been taken into consideration by the HighCourt while considering the election petition. In theabsence of proper verification, the election petition wasincomplete as it did not contain a complete cause ofaction. [Para 24] [72-B-D]

3. It is not correct to say that it could not have beenthe intention of the legislature that two affidavits wouldbe required, one under Or. VI r. 15(4) CPC and the otherin Form 25. It is also not correct to say that even in a casewhere the proviso to Section 83(1) was attracted, a singleaffidavit would be sufficient to satisfy the requirementsof both the provisions. Filing of two affidavits in respectof the self-same matter, would not render one of themredundant. [Para 25] [72-F-H; 73-A]


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1991 (2) SCR 752 Referred to Para 25

2004 (5) Suppl. SCR 682 Referred to Para 25

2010 (7) SCR 712 Referred to Para 25


From the Judgment & Order dated 17.05.2010 of the HighCourt of Kerala in Election Petition No. 6 of 2009.

Krishnan Venugopal, V.K. Biju, Mannan, Gaurav, V.K.Verma for the Appellant.

P.P. Rao, S. Udaya Kumar Sagar, Karan Kanwal,Apeksha Sharan, Utsav Sidhu, Abhimanya T., VineetiSasidharan (for Lawyers’S Knit & Co.) for the Respondents.


ALTAMAS KABIR, J. 1. The appellant herein, whocontested the parliamentary elections held on 16th April, 2009for the No.05 - Kozhikode Constituency of the Lok Sabha,challenged the election of the Respondent, Shri M.K.Raghavan, who was the returned candidate from the saidconstituency, by way of an Election Petition filed under Section81 read with Sections 100, 101 and 123 of the Representationof the People Act, 1951, hereinafter referred to as the "1951Act". The Appellant contested the election as the officialcandidate of the Communist Party of India (Marxist), hereinafterreferred to as the "CPI(M)" led by the Left Democratic Front,hereinafter referred to as the "LDF", whereas the RespondentNo.1 was a candidate of the Indian National Congress and hecontested the election as the candidate of the UnitedDemocratic Front, hereinafter referred to as the "UDF".

2. The ground on which the election of the RespondentNo.1 was challenged was that he had published false

Sreyamakumar and Ors. (2010) 7 SCC 428: 2010 (7) SCR712 – referred to.

Prasanna Kumar vs. G.M. Siddeshwar AIR 2010Karnataka 113; V. Narayanaswamy vs. C.P.Thirunavukkarasu (2000) 2 SCC 294: 2000 (1) SCR 292;Ashwani Kumar Sharma vs. Yaduvansh Singh and Ors (1998)1 SCC 416: 1997 (5) Suppl. SCR 616; Raj Narain vs. IndiraNehru Gandhi and Anr. (1972) 3 SCC 850: 1972 (3) SCR841 – cited.

Case Law Reference:

AIR 2010 Karnataka 113 Cited Para 9

2000 (1) SCR 292 Cited Para 11

1997 (5) Suppl. SCR 616 Cited Para 12

1972 (3) SCR 841 Cited Para 12

1978 (3) SCR 446 Relied on Para 14

2000 (1) SCC 481 Relied on Para 14


2000 (3) Suppl. SCR 331 Relied on Para 15


1986 Supp SCC 315 Relied on Para 17


(1987) Supp SCC 93 Relied on Para 17



1964 SCR 573 Referred to Para 25


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4. During the hearing of the petition, a question was raisedwith regard to the maintainability of the petition for want of acomplete cause of action. After considering the submissionsmade on such ground, the High Court accepted the objectiontaken with regard to the maintainability of the Election Petitionand dismissed the same.

5. Appearing for the Appellant, Mr. Krishnan Venugopal,learned Senior Advocate, submitted that the learned SingleJudge of the High Court had dismissed the Election Petitionon two grounds :

(i) The Election Petition did not make out a completecause of action in so far as it did not containaverments regarding the knowledge of theRespondent No.1 about the falsity of the statementsin relation to each of the publications; and

(ii) The false statements did not relate to the personalcharacter or candidature of the candidate within themeaning of false statements in section 123(4) of theAct.

6. On behalf of the Respondent No.1, a preliminaryobjection was raised at the time of hearing that the ElectionPetition was incomplete and was liable to be dismissed as itdid not contain the requisite affidavit in Form 25, as requiredunder the proviso to Section 83(1) of the 1951 Act read withRule 94A of the Conduct of Election Rules, 1961. Mr.Venugopal contended that the trial of an Election Petition wasa quasi-criminal proceeding which entailed that the statutoryrequirements for an Election Petition had to be strictlyconstrued. Of course, it is also necessary to protect the purityand sobriety of elections by ensuring that the candidates didnot secure vote by undue influence, fraud, communalpropaganda, bribery or other corrupt practices, as mentionedin the 1951 Act. Mr.Venugopal submitted that the importanceof Section 123(4) of the above Act lies in the fact that voters

statements with regard to the Appellant and thereby committedcorrupt practice within the meaning of Section 123(4) of the1951 Act, which provides that the publication by a candidateor his agent or by any other person with the consent of acandidate or his election agent, of any statement of fact whichis false in relation to the personal character, conduct of anycandidate, shall be deemed to be guilty of corrupt practicewithin the meaning of Section 123 of the 1951 Act. The detailsof the publications have been set out in paragraph 4 of theimpugned judgment and are as follows :

""A. "Corrupt practice" by the publication of allegedly falsestatements in the form of -

(1) Annexure A ("Jagratha" ("Be careful") Newsletterbearing no date) allegedly published on 14-4-2009and distributed on 15-4-2009

(2) Annexure H (Anonymous notice allegedly publishedon 14-4-2009 and 15-4-2009

(3) Annexure K (Report in the Mathrubhumi daily dated31-3-2009 of the speech of M.P. Veerendra Kumar

(4) Annexure L Hand Bill dated 11-4-2009 allegedlydistributed on 14-4-2009

(5) Annexure M Wall poster allegedly published on 14-4-2009 & 15-4-2009

(6) Annexure N Wall poster -do- -do-

AND

B. Fielding of other candidates having similarity in names."

3. The highlights of the six publications have also beenshown in a tabular chart in paragraph 5 of the impugnedjudgment and speak for themselves.


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in the said provision. Mr. Venugopal submitted that this Courthas repeatedly held that non-compliance of Section 83(1),which includes the requirement of verification under Section83(1)(c), is a "curable" defect. In support of the saidproposition, Mr. Venugopal referred to the decisions of thisCourt in (i) Murarka Radhey Shyam Ram Kumar Vs. RoopSingh Rathore & Others [AIR 1964 SC 1545]; (ii) F.A. Sapa& Ors. Vs. Singora & Ors. [(1991) 3 SCC 375]; (iii) SardarHarcharan Singh Brar Vs. Sukh Darshan Singh & Ors. [(2004)11 SCC 196] and K.K. Ramachandran Master Vs. M.V.Sreyamakumar & Ors. [(2010) 7 SCC 428]. Mr. Venugopalsubmitted that the submission made on behalf of theRespondent No.1 that an affidavit in Form 25 is an integral partof an Election Petition has been considered and rejected by aBench of three learned Judges of this Court in F.A. Sapa'scase (supra). Learned counsel submitted that as a generalproposition, this Court has held that the affidavit of an ElectionPetition is not an integral part of a petition.

9. Mr. Venugopal next urged that it had been contendedon behalf of the Respondent No.1 that the Election Petitioner/Appellant had filed only one affidavit under Order VI Rule 15(4)of the CPC and had not filed a separate and second affidavitin Form 25, as provided under Section 94A of the Conduct ofElection Rules, 1961, which is also required to be filed underthe proviso to Section 83(1) of the Act in support of anallegation of a corrupt practice. Referring to the provisions ofSection 83(1)(c) of the 1951 Act and Order VI Rule 15(4) CPC,Mr. Venugopal drew our attention to the Proviso to Section83(1) which states that where the petitioner alleges a corruptpractice, the Election Petition shall "also be accompanied byan affidavit in the prescribed form". Learned counsel submittedthat two affidavits would be necessary only where an ElectionPetitioner wanted the election to be set aside both on groundsof commission of one or more corrupt practices under Section100(1)(b) of the Act and other grounds as set out in Section100(1). In such a case, two affidavits could possibly be

should not be misled at the time of casting of their votes by avicious and defamatory campaign against candidates.Mr.Venugopal submitted that the common refrain in all thesevarious decisions is that while the requirements of the electionlaws are strictly followed, at the same time, the purity of theelection process had to be maintained at all costs.

7. In addition to the above, Mr. Venugopal urged that theargument which had not been advanced earlier and had beenorally raised for the first time before this Court, should not betaken into consideration. The preliminary objection taken at thetime of final hearing that the Election Petition was not supportedby an affidavit in Form 25, ought not to have been taken by theRespondent No.1 either in his Written Statement or in theAdditional Written Statement filed in the High Court, or even inthe reply to the Election Appeal before this Court. Accordingly,such an objection ought not to have been entertained and isliable to be ignored. Apart from the above, the learned SingleJudge had already taken the Appellant's affidavit on record on15th December, 2009, wherein it was expressly noted that theRespondent No.1 did not oppose the same being taken onrecord. Mr. Venugopal submitted that once the affidavit hadbeen taken on record, it was no longer open to the RespondentNo.1 to contend that the Election Petition was defective on theground of absence of affidavit in support thereof. Mr. Venugopalsubmitted that the affidavit was in substantial compliance withthe requirements of Order VI Rule 15(4) read with Order XIXof the Code of Civil Procedure, 1908, hereinafter referred toas "CPC" , and with Form 25 appended to the Conduct ofElection Rules, 1961.

8. Mr. Venugopal urged that an Election Petition could notbe dismissed in limine on the ground of non-compliance withthe requirements of Section 83(1) thereof. It was also pointedout that Section 86(1) of the Act requires dismissal of anElection Petition only when it did not satisfy the requirementsof Sections 81, 92 and 117. Section 83 has not been included


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required, one under Order VI Rule 15(4) CPC and another inForm 25. However, even in such a case, a single affidavit thatsatisfies the requirements of both the provisions could be filed.In any event, when the Election Petition was based entirely onallegations of corrupt practices, filing of two affidavits over theself-same matter would render one of them otiose, whichproposition was found acceptable by the Karnataka High Courtin Prasanna Kumar Vs. G.M. Siddeshwar [AIR 2010 Karnataka113]. Learned counsel urged that even non-mentioning andwrong mentioning of a provision in an application is not aground to reject the application.

10. Mr. Venugopal submitted that the object of the affidavitunder the Proviso to Section 83(1) is to fix responsibility witha person making the allegations. Referring to the decision ofthis Court in the case of F.A. Sapa (supra), Mr. Venugopalpointed out that this Court had held that while there is sufficientjustification for the law to be harsh who indulged in suchpractices, there is also the need to ensure that such allegationsare made with the sense of responsibility and concern and notmerely to vex the returned candidate.

11. Mr. Venugopal also urged that it has been held by thisCourt in V. Narayanaswamy Vs. C.P. Thirunavukkarasu[(2000) 2 SCC 294], that a petition levelling a charge of corruptpractice is required by law to be supported by an affidavit andthe Election Petitioner is obliged to disclose his source ofinformation in respect of the commission of the corrupt practice.He has to indicate that which of the allegations were true to hisknowledge and which to his belief on information received andbelieved by him to be true. It was further observed that it wasnot the form of the affidavit but the substance that matters. Mr.Venugopal submitted that in the instant case, contrary to whathad been argued on behalf of the Respondent No.1, read as awhole, the affidavit is in substantial compliance with therequirements of Form 25 because it clearly specifies thesource of information, personal knowledge as well as the

names of the person from whom information was received bythe Appellant in respect of each of the paragraphs andschedules annexed to the Election Petition.

12. On the question of finding of learned Single Judge thatthe Election Petitioner failed to state that a complete cause ofaction was incorrect, since the information sought for wasavailable in different parts of the Election Petition. Mr.Venugopal submitted that the law laid down by this Court is thatpleadings should not be read in isolation but must be read asa whole and construed reasonably to determine whether theydid state a cause of action. Learned counsel submitted that itis now well-settled that material particulars, as opposed tomaterial facts, need not be set out in the Election Petition andmay be supplied at a later date. In this regard, learned counselreferred to the decision of this Court in Ashwani KumarSharma Vs. Yaduvansh Singh & Ors. [(1998) 1 SCC 416], andcertain other decisions which only served to multiply thedecisions rendered on the said subject. Further submission wasmade that a "clumsy drafting" of an Election Petition should notresult in its dismissal so long as the petition could make out acharge of a head of corrupt practice when it is read as a wholeand construed reasonably, as was observed in the case of RajNarain Vs. Indira Nehru Gandhi & Anr. [(1972) 3 SCC 850].

13. Mr. Venugopal submitted that in the present ElectionAppeal the requirements of a proper pleading have been fullymet but the learned Single Judge failed to appreciate that thereis just one single head of corrupt practice alleged under Section123(4) of the 1951 Act, relating to the publication of falsestatements about the personal character and candidature of theAppellant that were calculated to prejudice his election. Learnedcounsel submitted that the onus of proving a particularingredient of Section 123(4) of the 1951 Act was not veryonerous, since the Appellant is only required to plead and provethat the statements made by the Respondent No.1 or hiselection agent or any person acting with the consent of eitherthe Respondent No.1 or his agent are false. Once such


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statement is made on oath, the onus shifts to Respondent No.1to demonstrate that he was not aware that the statements werenot false. Various decisions were cited in support of suchsubmission, to which reference may be made, if required, atthe later stage of the judgment. The learned counsel submittedthat the learned Single Judge had erred in concluding that theallegations in various publications were not against thepersonal character or candidature of the Appellant. It wassubmitted that the statement published in the newspapers wascertainly sufficient to effect the private or personal character ofthe candidate. Mr. Venugopal submitted that the order of theHon'ble High Court was required to be set aside with thedirection to expedite the appeal of the Election Petitioner andto render its verdict at an early date.

14. The submissions of Mr. P.P. Rao, learned SeniorAdvocate, appearing for the Respondent No.1, were onexpected lines. Mr. Rao reiterated the submissions which havebeen made before the High Court that the Proviso to Section83(1)(c) of the 1951 Act, requires a separate affidavit to be filedin Form 25 in support of each allegation of corrupt practicemade in the Election Petition. Mr. Rao submitted that in theinstant case, no such affidavit had been filed at all. He alsourged that it was settled law that the affidavit required to be filed,by the Proviso to Section 83(1)(c), is an integral part of theElection Petition and in the absence thereof, such petition didnot disclose a cause of action and could not, therefore, beregarded as an Election Petition, as contemplated underSection 81 of the aforesaid Act. Mr. Rao urged that the ElectionPetition filed by the Appellant was, therefore, liable to bedismissed under Section 86(1) of the 1951 Act read with OrderVII Rule 11(a) CPC. Reference was made to the decision ofthis Court in M. Kamalam Vs. Dr. V.A. Syed Mohammed[(1978) 2 SCC 659], in which this Court had held that if theElection Petition did not comply with Section 81 of the 1951Act, the High Court was required to dismiss the same underSection 86(1) thereof. Learned counsel then referred to the

decision of this Court rendered in R.P. Moidutty Vs. P.T. KunjuMohammad & Anr. [(2000) 1 SCC 481], wherein also theprovision of verification of an election petition fell forconsideration and it was held that for non-compliance with therequirements of the Proviso to Section 83(1) of the 1951 Actand Form 25 appended to the Rules, the election petition wasliable to be dismissed at the threshold. It was also held that thedefect in verification was curable, but failure to cure the defectswould be fatal. It was further held that the object of requiringverification of an election petition is to clearly fix theresponsibility for the averments and allegations in the petitionon the person signing the verification and, at the same time,discouraging wild and irresponsible allegations unsupported byfacts.

15. In regard to his aforesaid submission that the ElectionPetition must disclose the cause of action and that in respectof allegations in relation to corrupt practice, the same had tobe supported by affidavit disclosing source of information andstating that the allegations are true to the petitioner'sknowledge and belief by him to be true, Mr. Rao also referredto two other decisions of this Court in : (i) V. NarayanaswamyVs. C.P. Thirunavukkarasu [(2000) 2 SCC 294] and (ii)Ravinder Singh Vs. Janmeja Singh & Ors. [(2000) 8 SCC191].

16. Mr. Rao contended that Section 83(1)(c) of the aboveAct requires the Election Petition to be signed by the petitionerand verified in the manner specified in the CPC for theverification of pleadings. Referring to Order VI Rule 15 of theCode, Mr. Rao submitted that Sub-Rule (4) requires that theperson verifying the pleading shall also furnish an affidavit insupport of his pleadings, which was a requirement independentof the requirement of a separate affidavit with respect to eachcorrupt practice alleged, as mandated by the Proviso toSection 83(1)(c) of the above Act. Mr. Rao submitted that inthe body of the Election Petition, there is no averment that the


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Respondent No.1 believed the statements made in thepublications to be false and did not believe them to be true,which, Mr. Rao submitted, was an essential ingredient of thecorrupt practice alleged under Section 123(4) of the 1951 Act.Mr. Rao, however, admitted that in ground A of the ElectionPetition there is a submission based on the advice of thepetitioner's counsel as per the verification made in the affidavitfiled under Order VI Rule 15(4) CPC, which standsincorporated in Section 83(1)(c) of the 1951 Act by reference.According to Mr. Rao, there was no factual foundation laid forthe alleged corrupt practice and the Election Petition was,therefore, liable to be dismissed.

17. Learned senior counsel further contended that omissionto state a single material fact would lead to an incompletecause of action and an Election Petition without material factsrelating to a corrupt practice was not an Election Petition at alland such omission would amount to non-compliance of themandate of Section 83(1)(a) of the above Act, which renderedthe Election Petition ineffective. Beginning with the decision ofthis Court in Hardwari Lal Vs. Kanwal Singh [(1972) 1 SCC214], Mr. Rao also referred to various other decisions on thesame lines, including that of Azhar Hussain Vs. Rajiv Gandhi[1986 Supp SCC 315], which had relied on the decision inSamant N. Balkrishna & Anr. Vs. George Fernandez & Ors.[(1969) 3 SCC 238], Dhartipakar Madan Lal Agarwal Vs. RajivGandhi [(1987) Supp SCC 93] and Anil Vasudev SalgaonkarVs. Naresh Kushali Shigaonkar [(2009) 9 SCC 310], to whichreference may be made, if required, at a later stage.

18. Mr. Rao also urged that no corrupt practice could bemade out in terms of Section 123(4) of the 1951 Act, if theallegations did not relate to the personal character, conduct orcandidature of the concerned candidate and in support thereof,he relied on the decision of this Court in the case of Dev KantaBarooah Vs. Golok Chandra Baruah & Ors. [(1970) 1 SCC392] and several other cases, to which reference, if required,may be made at a later stage.

19. Attempting to distinguish the decisions cited by Mr.Venugopal, Mr. Rao submitted that all the said case laws weredistinguishable on facts and had no application to the facts ofthe present case. In fact, Mr. Rao submitted that in F.A. Sapa'scase (supra), it has been clearly indicated that the petition whichdid not strictly comply with the requirements of Section 83 ofthe 1951 Act, could not be said to be an Election Petition incontemplation of Section 81 and attract dismissal underSection 86(1) of the said Act.

20. Mr. Rao submitted that the Appellant had not been ableto refute the findings of fact recorded by the High Court, whichhad elaborately considered the decisions of this Court andcorrectly applied to the facts of the present case. Mr. Raosubmitted that the present appeal has no merit and is liable tobe dismissed with costs.

21. Although, during the hearing of the Petition, a questionwas raised regarding the maintainability of the Petition for wantof a complete cause of action and the same was accepted bythe High Court which dismissed the Election Petition, thelearned Single Judge of the High Court took the view that theElection Petition did not make out a complete cause of actionas it was not in conformity with Form 25 annexed to the Rules.

22. This brings us to the next question that in order toprotect the purity of elections in the manner indicated, it wasthe duty of the State to ensure that the candidates in theelections did not secure votes either by way of an undueinfluence, fraud, communal propaganda, bribe or other typesof corrupt practices, as specified in the 1951 Act.

23. The provisions of Chapter II of the 1951 Act relate tothe presentation of election petitions to the High Court andSection 83 which forms part of Chapter II deals with thecontents of the Election Petition to be filed. For the purpose ofreference, Section 83 is extracted hereinbelow :-


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83. Contents of petition. (1) An election petition-

(a) shall contain a concise statement of the materialfacts on which the petitioner relies;

(b) shall set forth full particulars of any corrupt practicethat the petitioner alleges, including as full astatement as possible of the names of the partiesalleged to have committed such corrupt practiceand the date and place of the commission of eachsuch practice; and

(c) shall be signed by the petitioner and verified in themanner laid down in the Code of Civil Procedure,1908 (5 of 1908) for the verification of pleadings:

Provided that where the petitioner alleges anycorrupt practice, the petit ion shall also beaccompanied by an affidavit in the prescribed formin support of the allegation of such corrupt practiceand the particulars thereof.

(2) Any schedule or annexure to the petition shall also besigned by the petitioner and verified in the same manneras the petition.

As will be seen from the Section itself, the ElectionPetitioner is required to set forth full particulars of any corruptpractice that he alleges and the names of the parties involvedtherein and it further provides that the same is to be signed bythe Petitioner and verified in the manner laid down in the Codeof Civil Procedure for the verification of proceedings. What isimportant is the proviso which makes it clear that where theElection Petitioner alleges any corrupt practice, the Petitionshall also be accompanied by an affidavit in the prescribed formin support of the allegation of such corrupt practice and theparticulars thereof and the schedule or annexures to the Petitionshall also be signed by the Petitioner and verified in the same

manner as the Petition. In other words, when corrupt practicesare alleged in an Election Petition, the source of suchallegations has to be disclosed and the same has to besupported by an affidavit in support thereof.

24. In the present case, although allegations as to corruptpractices alleged to have been employed by the Respondenthad been mentioned in the body of the Petition, the Petitionitself had not been verified in the manner specified in Order VIRule 15 of the Code of Civil Procedure. Sub-Section (4) ofSection 123 of the 1951 Act defines "corrupt practice" and thepublication of various statements against the Respondent whichwere not supported by affidavit, could not, therefore, have beentaken into consideration by the High Court while consideringthe Election Petition. In the absence of proper verification, it hasto be accepted that the Election Petition was incomplete as itdid not contain a complete cause of action.

25. Of course, it has been submitted and accepted thatthe defect was curable and such a proposition has been upheldin the various cases cited by Mr. Venugopal, beginning with thedecision in Murarka Radhey Shyam Ram Kumar's case(supra) and subsequently followed in F.A. Sapa's case (supra),Sardar Harcharan Singh Brar's case (supra) and K.K.Ramachandran Master's case (supra), referred tohereinbefore. In this context, we are unable to accept Mr.Venugopal's submission that despite the fact that the provisoto Section 83(1) of the 1951 Act provides that where corruptpractices are alleged, the Election Petition shall also beaccompanied by an affidavit in the prescribed form, it could nothave been the intention of the legislature that two affidavitswould be required, one under Order VI Rule 15(4) CPC andthe other in Form 25. We are also unable to accept Mr.Venugopal's submission that even in a case where the provisoto Section 83(1) was attracted, a single affidavit would besufficient to satisfy the requirements of both the provisions. Mr.Venugopal's submission that, in any event, since the Election

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73P.A. MOHAMMED RIYAS v. M.K. RAGHAVAN & ORS.[ALTAMAS KABIR, J.]

Petition was based entirely on allegations of corrupt practices,filing of two affidavits in respect of the self-same matter, wouldrender one of them redundant, is also not acceptable. As faras the decision in F.A. Sapa's case (supra) is concerned, ithas been clearly indicated that the Petition, which did not strictlycomply with the requirements of Section 86(1) of the 1951 Act,could not be said to be an Election Petition as contemplatedin Section 81 and would attract dismissal under Section 86(1)of the 1951 Act. On the other hand, the failure to comply withthe proviso to Section 83(1) of the Act rendered the ElectionPetition ineffective, as was held in Hardwari Lal's case (supra)and the various other cases cited by Mr. P.P. Rao.

26. In our view, the objections taken by Mr. P.P. Rao mustsucceed, since in the absence of proper verification ascontemplated in Section 83, it cannot be said that the causeof action was complete. The consequences of Section 86 ofthe 1951 Act come into play immediately in view of Sub-Section (1) which relates to trial of Election Petitions andprovides that the High Court shall dismiss the Election Petitionwhich does not comply with the provisions of Section 81 orSection 82 or Section 117 of the 1951 Act. Although, Section83 has not been mentioned in Sub-Section (1) of Section 86,in the absence of proper verification, it must be held that theprovisions of Section 81 had also not been fulfilled and thecause of action for the Election Petition remained incomplete.The Petitioner had the opportunity of curing the defect, but itchose not to do so.

27. In such circumstances, we have no other option, butto dismiss the appeal.

28. The Appeal is, accordingly, dismissed, but there willbe no order as to costs.

K.K.T. Appeal dismissed.

A. SHANMUGAMv.

ARIYA KSHATRIYA RAJAKULA VAMSATHU MADALAYANANDHAVANA PARIPALANAI SANGAM REPRESENTED

BY ITS PRESIDENT ETC.(Civil Appeal Nos. 4012-13 of 2012)

APRIL 27, 2012

[DALVEER BHANDARI AND DIPAK MISARA, JJ.]

Suit – Suit for permanent injunction – Claimingpossession of suit property – By the watchman who wasengaged for taking care of the suit property – Claimant takingplea of adverse possession – Cross suit also by the owner ofthe suit property – Original court deciding in favour of the owner– First appellate court deciding in favour of the claimant –Second appeal decided against the claimant – On appeal,held: Watchman, caretaker or a servant employed to look afterthe property can never acquire interest in the propertyirrespective of his long possession – Such person holds theproperty of the principal only on behalf of the principal –Courts are not justified in protecting possession of suchperson.

Administration of Justice – Abuse of process of law –Watchman of suit property – Claiming possession of theproperty by filing suit – Held: The claimant is guilty of misuseof process of law – It is example of delayed administration ofcivil justice in the courts as the matter took 17 years to befinally decided by High Court – The claimant is guilty ofsuppressing material facts and introducing false pleas andirrelevant documents to mislead the court – Every litigant isexpected to state truth in its pleadings, affidavits and evidence– Once the court discovers falsehood, concealment,distortion, obstruction or confession in pleadings and

[2012] 4 S.C.R. 74

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documents, it should in addition to full restitution imposeappropriate costs – It is obligation of the court to neutralizeunjust and undeserved advantage obtained by abusing thejudicial process – In the instant case ordinarily heavy costwould have been imposed, but in view of the fact that theclaimant is a watchman, nominal cost of Rs. 25,000 imposed– Costs.

Respondent-society was the owner of the suitproperty which was a Dharmshala. Father of the appellantwas engaged as a watchman of the said Dharmshala ona monthly salary by the respondent-society and he livedthere with his family (including the appellant) in thatcapacity.

Appellant filed a suit in the year 1994 for permanentinjunction against the respondent-society, alleging thatthe society tried to dispossess him. The suit wasdismissed. But the appeal against the same was alloweddecreeing the suit.

The cross suit of the respondent-society wasdecreed. The decree was reversed by first appellate court.In second appeals, in both the suits, High Court set asidethe judgments of first appellate courts. Hence the presentappeals, by the appellant.

Dismissing the appeals, the Court

HELD: 1.1 A well-reasoned judgment and a decreepassed by the trial court ought not to have been reversedby the first appellate court. The appellant’s father wasengaged as a Watchman on a monthly salary and in thatcapacity he was allowed to stay in the suit premises andafter his death his son (the appellant herein) continuedto serve the respondent-society as a watchman and wasallowed to live in the premises. The property is admittedlyowned by the respondent-society. [Para 19] [88-C-D]

1.2 The appellant has also failed to prove the adversepossession of the suit property. Only by obtaining theration card and the house tax receipts, the appellantcannot strengthen his claim of adverse possession. TheHigh Court was fully justified in reversing the judgmentof the first appellate court and restoring the judgment ofthe trial court. [Para 20] [88-E-F]

1.3 Watchman, caretaker or a servant employed tolook after the property can never acquire interest in theproperty irrespective of his long possession. Thewatchman, caretaker or a servant is under an obligationto hand over the possession forthwith on demand.According to the principles of justice, equity and goodconscience, courts are not justified in protecting thepossession of a watchman, caretaker or servant who wasonly allowed to live into the premises to look after thesame. The watchman, caretaker or agent holds theproperty of the principal only on behalf the principal. Heacquires no right or interest whatsoever in such propertyirrespective of his long stay or possession. Theprotection of the court can be granted or extended to theperson who has valid subsisting rent agreement, leaseagreement or licence agreement in his favour. [Para 42][116-H; 117-A-D]

2.1 The present case demonstrates widely prevalentstate of affairs where litigants raise disputes and causelitigation and then obstruct the progress of the case onlybecause they stand to gain by doing so. It is a matter ofcommon experience that the Court’s otherwise scarceresources are spent in dealing with non-deserving casesand unfortunately those who were waiting in the queuefor justice in genuine cases usually suffer. This case is atypical example of delayed administration of civil justicein the courts. A small suit, where the appellant wasdirected to be evicted from the premises in 1994, took 17


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77 78A. SHANMUGAM v. ARIYA K.R.V.M.N.P. SANGAM REP. BYITS PRESIDENT ETC.

grip of the facts before they start dealing with the case.That would avoid unnecessary delay in disposal of thecases. [Para 28] [101-E]

2.6 Ensuring discovery and production ofdocuments and a proper admission/denial is imperativefor deciding civil cases in a proper perspective. Inrelevant cases, the courts should encourageinterrogatories to be administered. [Para 29] [101-F]

2.7 If issues are properly framed, the controversy inthe case can be clearly focused and documents can beproperly appreciated in that light. The relevant evidencecan also be carefully examined. Careful framing of issuesalso helps in proper examination and cross-examinationof witnesses and final arguments in the case. [Para 32][102-G-H]

2.8 A large number of cases are filed on false claimsor evasive pleas are introduced by the defendant tocause delay in the administration of justice and this canbe sufficiently taken care of, if the courts adopt realisticapproach granting restitution. Unless wrongdoers aredenied profit or undue benefit from frivolous litigations,it would be difficult to control frivolous and uncalled forlitigations. The courts have been very reluctant to grantthe actual or realistic costs. The cases need to be decidedwhile keeping pragmatic relaties in view. It is to beensured that unscrupulous litigant is not permitted toderive any benefit by abusing the judicial process. [Paras34 and 35] [104-D-E; 105-C-D]

Ramrameshwari Devi v. Nirmala Devi (2011) 8 SCC 249:2011 (8) SCR 992 ; Indian Council for Enviro-Legal Actionv. Union of India and Ors. (2011) 8 SCC 161: 2011 (9 ) SCR146 – relied on.

2.9 False averments of facts and untenable

years, before the matter was decided by the High Court.Unscrupulous litigants are encouraged to file frivolouscass to take undue advantage of the judicial system.[Para 21] [88-G-H; 89-A]

2.2 The purity of pleadings is immensely importantand relevant. The pleadings need to be criticallyexamined by the judicial officers or judges both beforeissuing the ad interim injunction and/or framing of issues.The entire journey of a judge is to discern the truth fromthe pleadings, documents and arguments of the parties.Truth is the basis of justice delivery system. [Paras 23 and24] [93-E-F]

Maria Margarida Sequeria Fernandes and Ors. v.Erasmo Jack deSequeria (Dead) through L.Rs. (2012) 3SCALE 550; Dalip Singh v. State of U.P. and Ors. (2010) 2SCC 114: 2009 (16) SCR 111 – relied on.

2.3 The pleadings are foundation of litigation butsufficient attention is not paid to the pleadings anddocuments by the judicial officers before dealing with thecase. It is the bounden duty and obligation of the partiesto investigate and satisfy themselves as to thecorrectness and the authenticity of the matter pleaded.[Para 26] [101-B-C]

2.4 The pleadings must set-forth sufficient factualdetails to the extent that it reduces the ability to putforward a false or exaggerated claim or defence. Thepleadings must inspire confidence and credibility. If falseaverments, evasive denials or false denials areintroduced, then the Court must carefully look into it whiledeciding a case and insist that those who approach theCourt must approach it with clean hands. [Para 27] [101-D]

2.5 It is imperative that judges must have complete


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to full restitution impose appropriate costs. The courtmust ensure that there is no incentive for wrong doer inthe temple of justice. Truth is the foundation of justice andit has to be the common endeavour of all to uphold thetruth and no one should be permitted to pollute thestream of justice. It is the bounden obligation of the courtto neutralize any unjust and/or undeserved benefit oradvantage obtained by abusing the judicial process.[Para 42] [116-E-G]

2.13 In the facts of the case, it is quite evident thatthe appellant is guilty of suppressing material facts andintroducing false pleas and irrelevant documents. Theappellant has also clouded the entire case with pleaswhich have nothing to do with the main controversyinvolved in the case. [Para 39] [115-D-E]

2.14 All documents filed by the appellant along withthe plaint have no relevance to the controversy involvedin the case. The documents have been filed to misleadthe court. The first appellate court has, in fact, got intothe trap and was misled by the documents and reachedto an entirely erroneous finding that resulted in unduedelay of disposal of a small case for almost 17 years.[Para 40] [115-F-G]

2.15 The appellant is also guilty of introducinguntenable pleas. The plea of adverse possession whichhas no foundation or basis in the facts and circumstancesof the case was introduced to gain undue benefit. Thecourt must be cautious in granting relief to a party guiltyof deliberately introducing irrelevant and untenable pleasresponsible for creating unnecessary confusion byintroducing such documents and pleas. These factorsmust be taken into consideration while granting reliefand/or imposing the costs. [Para 41] [115-H; 116-A-B]

3. In the instant case, the court would have ordinarily

contentions are serious problems faced by the courts.The other problem is that litigants deliberately createconfusion by introducing irrelevant and minimallyrelevant facts and documents. The court cannot rejectsuch claims, defences and pleas at the first look. It maytake quite sometime, at times years, before the court isable to see through, discern and reach to the truth. Moreoften than not, they appear attractive at first blush andonly on a deeper examination, the irrelevance andhollowness of those pleadings and documents come tolight. [Para 37] [114-G-H; 115-A]

2.10 The courts are usually short of time because ofhuge pendency of cases and at times the courts arriveat an erroneous conclusion because of false pleas,claims, defences and irrelevant facts. A litigant coulddeviate from the facts which are liable for all theconclusions. In the journey of discovering the truth, attimes, Supreme Court, on later stage, but oncediscovered, it is the duty of the court to take appropriateremedial and preventive steps so that no one shouldderive benefits or advantages by abusing the process oflaw. The court must effectively discourage fraudulent anddishonest litigants. [Para 38] [115-B-C]

2.11 It is the bounden duty of the Court to uphold thetruth and do justice. Every litigant is expected to statetruth before the law court whether it is pleadings,affidavits or evidence. Dishonest and unscrupulouslitigants have no place in law courts. The ultimate objectof the judicial proceedings is to discern the truth and dojustice. It is imperative that pleadings and all otherpresentations before the court should be truthful. [Para42] [116-C-E]

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the High Court of Judicature at Madras in S.A. No. 1973 of 2002and S.A. No. 869 of 2009 dated April 20, 2011. In both theseappeals, A. Shanmugam is the appellant and Ariya KshatriyaRaja Kulavamsa Madalaya Nandhavana Paripalana Sangamis the respondent which for convenience hereinafter is referredto as the ‘Society’.

4. The property in question belonged to one, MuthuNaicker, who dedicated the suit land for construction of aDharamshala. In the southern part of India, it is called as‘choultry’. A ‘Dharamshala’ is commonly known as ‘a placewhere boarding facilities are provided either free of cost or ata nominal cost’. In the instant case, a Dharamshala was to beconstructed for the benefit of the Ariya Kshatriya community.The appellant’s father, Appadurai Pillai was engaged as aWatchman on a monthly salary by the respondent-Society tolook after the Dharamshala and in that capacity lived in thepremises with his family including the appellant.

5. According to the appellant, in the year 1994, therespondent-Society claiming to be the owner of the suit propertytried to dispossess the appellant by force necessitating theappellant to file a suit in O.S. No.1143 of 1994 on the file ofthe Second Additional District Munsif, Tiruvannamalai prayingfor issuance of permanent injunction against the respondent-Society. The said suit was, however, dismissed. As againstthat, the appellant preferred an appeal in A.S. No.94 of 2001on the file of the Additional District Judge, Tiruvannamalai andthe said appeal was allowed and consequently, the appellant’ssuit was decreed. The respondent-Society preferred a SecondAppeal in S.A. No.1973 of 2002 before the High Court ofMadras against the said judgment of the Additional DistrictJudge.

6. The respondent-Society during the pendency of SecondAppeal filed a suit in O.S. No.239 of 2003 before the AdditionalSubordinate Judge, Tiruvannamalai praying for declaration oftitle and recovery of possession of the suit property comprised

imposed heavy costs and would have ordered restitutionbut looking to the fact that the appellant is a watchmanand may not be able to bear the financial burden, theappeals are dismissed with very nominal costs of Rs.25,000/- to be paid within a period of two months and theappellant is directed to vacate the premises within twomonths from the date of the judgment and handoverpeaceful possession of the suit property to therespondent-society. [Para 43] [117-E-F]

Alagi Alamelu Achi v. Ponniah Mudaliar AIR 1962Madras 149 – referred to.

Case Law Reference:

AIR 1962 Madras 149 Referred to Para 13

(2012) 3 SCALE 550 Relied on Para 22




CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.4012-13 of 2012.

From the Judgment & Order dated 20.04.2011 of the HighCourt of Judicature at Madras in S.A. Nos. 1973 of 2002 and869 of 2009.

V. Prabhakar, R. Chandrachud, Jyoti Prashar, S. Natesan,Arul for the Appellant.


DALVEER BHANDARI, J. 1. Delay condoned.

2. Leave granted.

3. These two appeals arise out of cross suits filed before


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in T.S. No.1646/1 of Tiruvannamalai Town having an extent of70 feet east to west and 30 feet north to south bearing OldDoor No.116 and New Door No.65. The said suit was decreedas prayed for. Against that, the appellant preferred an appealin A.S. No.19 of 2008 on the file of the Additional District Judge,Tiruvannamalai and the decision of the trial court was reversedin Appeal resulting in the dismissal of the suit filed by therespondent-Society. Aggrieved against the appeal beingallowed and the suit being dismissed, the respondent-Societypreferred a Second Appeal in S.A. No.869 of 2009 before theHigh Court of Madras. The learned Judge of the Madras HighCourt heard both the aforesaid Second Appeals together andby a common judgment set aside the well-consideredjudgments of the First Appellate Court. Aggrieved by the saidcommon impugned judgment, the appellant has preferred theseappeals by way of special leave.

7. It may be pertinent to mention that the appellant filedOriginal Suit No.1143 of 1994 and also filed the followingdocuments :-

1. 20.11.1899 Certified copy of the registeredagreement between KrishnasamyRaju and others

2. Certified copy of the bye-law of theplaintiff Sangam(respondent-Societybefore us)

3. Certified copy of Memorandum ofAssociation of plaintiff-Sangam(respondent-Society before us)

4. Certified copy of RegistrationCertificate

5. Certified copy of field Map BookPlan

6. Certified copy of Town Survey FieldRegister

7. Certified copy of Demand RegisterExtent

8. Certified copy of Tax receipts (9)

9. Certified copy of Indemnity Card byMunusamy\

10. Certified copy of Ration Card ofMunusamy

11. Certified copy of account of plaintiffSangam (respondent-Society beforeus)

12. Certified copy of photocopy ofSilesasanam

13. 14.5.29 Copy of application by the Presidentof plaintiff-Sangam to MunicipalChairman

14. 24.2.32 Copy of the application by thePresident of plaintiff-Sangam toMunicipal Chairman

15. 17.8.2001 Certified copy of judgment in O.S.No. 1143/94 of District Munsif Court,Tiruvannamalai

16. 31.5.2002 Certified copy of judgment in A.S.No.94/2001 of Additional DistrictJudge, Tiruvannamalai

17. 2000-02 House Tax Receipt



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20. Xerox copy of the Minutes Book pages 13 to 19.

8. The trial court on the basis of the pleadings has framedthe following issues:-

1. Whether the plaintiff has the right to possession andenjoyment of the suit property?

2. Whether the plaintiff and his father have obtainedright of enjoyment through adverse enjoyment?

3. As per the averments on the defendant’s side, is ittrue that the plaintiff’s father in the capacity of thewatchman of the suit property has been in enjoymentof the suit property?

4. Whether the plaintiff is entitled to a relief ofpermanent injunction as prayed for by him?

5. Other relief?

9. In Suit No. 239 of 2003 filed by the respondent-Societyagainst the appellant seeking a decree for possession, thefollowing issues were framed:-

1. Whether the plaintiff Association is competent to filethis case?

2. Whether the plaint property belongs to the plaintiff’sclub?

3. Is it right that the defendant’s father Appadurai Pillaiin the capacity of a Watchman, has beenmaintaining the suit property?

4. When there is a Second Appeal pending before theHigh Court in S.A. No.1923 of 2002 against thejudgment and decree of the Court of the District

Munsif in O.S. No. 1143 of 1994 is sustainable.

5. Whether the defendant has acquired the right ofpossession in the plaint property due to adversepossession?

6. Whether this case has been procedurally evaluatedfor the court fee and jurisdiction?

7. Is the Court competent to try this Court?

8. To what other relief is the plaintiff entitled to?

10. The trial court in Suit No.1143 of 1994 has held thatthe appellant was in possession of the suit property in thecapacity of a Watchman. Regarding Issue No. 3, the trial courthas observed as under:

“… … …As per the July 1949 register Ex.D5 it isestablished that the plaintiff’s father has been employedas a watchman in the association. Further, it has alreadybeen decided that the suit property belongs to thedefendants Association. Further it has also been decidedthat apart from that the plaintiff’s father has only been awatchman to the suit property. Only source of the plaintiff’sfather had been a watchman, he was permitted to stay ina portion in the suit property only because of that he hadnot instituted a case for the total extent 110 x 56 feet butonly for the extent of 70 x 30 feet. He admits that theremaining portion is in the possession of the association.It is true that only for this reason the defendants associationhas permitted that plaintiff and his family members to residein the suit property. It is evident that only in the status of awatchman that the plaintiff’s father has been occupying aportion in the suit survey number. This issue is decidedaccordingly.”

11. Regarding Issue No. 2 of adverse possession, the trialcourt found that the appellant’s father was employed by the


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judgment of the First Appellate Court and held that the FirstAppellate Court was not justified in reversing the judgmentspassed by the trial court in both the abovementioned suits, O.S.No.1143 of 1994 and O.S. No.239 of 2003. The appellant,aggrieved by the said judgment, has preferred these twoappeals. We propose to decide both these appeals by thiscommon judgment.

18. We have heard the learned counsel for the appellantat length.

19. In our considered view, a well-reasoned judgment anda decree passed by the trial court ought not to have beenreversed by the First Appellate Court. It is reiterated that theappellant’s father was engaged as a Watchman on a monthlysalary and in that capacity he was allowed to stay in the suitpremises and after his death his son (the appellant herein)continued to serve the respondent-Society as a Watchman andwas allowed to live in the premises. The property is admittedlyowned by the respondent-Society.

20. The appellant has also failed to prove the adversepossession of the suit property. Only by obtaining the rationcard and the house tax receipts, the appellant cannot strengthenhis claim of adverse possession. The High Court was fullyjustified in reversing the judgment of the First Appellate Courtand restoring the judgment of the trial court. In our consideredopinion, no interference is called for.

21. This case demonstrates widely prevalent state of affairswhere litigants raise disputes and cause litigation and thenobstruct the progress of the case only because they stand togain by doing so. It is a matter of common experience that theCourt’s otherwise scarce resources are spent in dealing withnon-deserving cases and unfortunately those who were waitingin the queue for justice in genuine cases usually suffer. Thiscase is a typical example of delayed administration of civiljustice in our Courts. A small suit, where the appellant was

respondent-Society as a Watchman on a petty monthly salaryand in that capacity he was allowed to stay in the suit property.The appellant did not acquire the suit property by adversepossession and the issue was rightly decided against theappellant by the trial court.

12. Regarding issue No. 4, the trial court found that theappellant’s father was residing in the suit premises as aWatchman and after his death the appellant was also allowedto continue to stay in the suit property as a Watchman.

13. The trial court relied on a judgment of the Madras HighCourt reported in Alagi Alamelu Achi v. Ponniah Mudaliar AIR1962 Madras 149. The Court held that a person in wrongfulpossession is not entitled to be protected against lawful ownerby an order of injunction.

14. The trial court also came to a definite conclusion thatthe appellant has concealed certain vital facts and has notapproached the Court with clean hands and consequently, heis not entitled to the grant of discretionary relief of injunction.

15. The First Appellate Court reversed the judgment of thetrial court and held that the appellant was entitled to the reliefof injunction because of his long possession of the suit property.The First Appellate Court also set aside the decree passedby the trial court in O.S. No.239 of 2003.

16. The Suit No. 239 was decreed against the appellant.Aggrieved by this, the appellant preferred First Appeal beforethe District Judge which was allowed on 3rd April, 2009.Aggrieved by this judgment, the respondent-Society filed aSecond Appeal before the High Court which was allowed. TheHigh Court heard both the appeals filed by the respondent-Society and the same were allowed by a common judgmentdated 20th April, 2011.

17. The High Court by a detailed reasoning, set aside the


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directed to be evicted from the premises in 1994, took 17 yearsbefore the matter was decided by the High Court. Unscrupulouslitigants are encouraged to file frivolous cases to take undueadvantage of the judicial system.

22. The question often arises as to how we can solve thismenace within the frame work of law. A serious endeavour hasbeen made as to how the present system can be improved toa large extent. In the case of Maria Margarida SequeriaFernandes and Others v. Erasmo Jack de Sequeria (Dead)through L.Rs. (2012) 3 SCALE 550 (of which one of us,Bhandari, J. was the author of the judgment), this Court had laidstress on purity of pleadings in civil cases. We deem itappropriate to set out paras 61 to 79 of that judgment dealingwith broad guidelines provided by the Court which are equallyrelevant in this case:-

“61. In civil cases, pleadings are extremely important forascertaining the title and possession of the property inquestion.

62. Possession is an incidence of ownership and can betransferred by the owner of an immovable property toanother such as in a mortgage or lease. A licensee holdspossession on behalf of the owner.

63. Possession is important when there are no titledocuments and other relevant records before the Court,but, once the documents and records of title come beforethe Court, it is the title which has to be looked at first anddue weightage be given to it. Possession cannot beconsidered in vacuum.

64. There is a presumption that possession of a person,other than the owner, if at all it is to be called possession,is permissive on behalf of the title-holder. Further,possession of the past is one thing, and the right to remainor continue in future is another thing. It is the latter which

is usually more in controversy than the former, and it is thelatter which has seen much abuse and misuse before theCourts.

65. A suit can be filed by the title holder for recovery ofpossession or it can be one for ejectment of an ex-lesseeor for mandatory injunction requiring a person to removehimself or it can be a suit under Section 6 of the SpecificRelief Act to recover possession.

66. A title suit for possession has two parts – first,adjudication of title, and second, adjudication ofpossession. If the title dispute is removed and the title isestablished in one or the other, then, in effect, it becomesa suit for ejectment where the defendant must plead andprove why he must not be ejected.

67. In an action for recovery of possession of immovableproperty, or for protecting possession thereof, upon thelegal t itle to the property being established, thepossession or occupation of the property by a personother than the holder of the legal title will be presumed tohave been under and in subordination to the legal title, andit will be for the person resisting a claim for recovery ofpossession or claiming a right to continue in possession,to establish that he has such a right. To put it differently,wherever pleadings and documents establish title to aparticular property and possession is in question, it willbe for the person in possession to give sufficientlydetailed pleadings, particulars and documents to supporthis claim in order to continue in possession.

68. In order to do justice, it is necessary to direct theparties to give all details of pleadings with particulars.Once the title is prima facie established, it is for theperson who is resisting the title holder’s claim topossession to plead with sufficient particularity on thebasis of his claim to remain in possession and place


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(j) subsequent conduct, i.e., any event which mighthave extinguished his entitlement to possession orcaused shift therein; and

(k) basis of his claim that not to deliver possession butcontinue in possession.

71. Apart from these pleadings, the Court must insist ondocumentary proof in support of the pleadings. All thosedocuments would be relevant which come into existenceafter the transfer of title or possession or the encumbranceas is claimed. While dealing with the civil suits, at thethreshold, the Court must carefully and critically examinepleadings and documents.

72. The Court will examine the pleadings for specificity asalso the supporting material for sufficiency and then passappropriate orders.

73. Discovery and production of documents and answersto interrogatories, together with an approach of consideringwhat in ordinary course of human affairs is more likely tohave been the probability, will prevent many a false claimsor defences from sailing beyond the stage for issues.

74. If the pleadings do not give sufficient details, they willnot raise an issue, and the Court can reject the claim orpass a decree on admission.

75. On vague pleadings, no issue arises. Only when he soestablishes, does the question of framing an issue arise.Framing of issues is an extremely important stage in a civiltrial. Judges are expected to carefully examine thepleadings and documents before framing of issues in agiven case.

76. In pleadings, whenever a person claims right tocontinue in possession of another property, it becomesnecessary for him to plead with specificity about who was

before the Court all such documents as in the ordinarycourse of human affairs are expected to be there. Only ifthe pleadings are sufficient, would an issue be struck andthe matter sent to trial, where the onus will be on him toprove the averred facts and documents.

69. The person averring a right to continue in possessionshall, as far as possible, give a detailed particularizedspecific pleading along with documents to support hisclaim and details of subsequent conduct which establishhis possession.

70. It would be imperative that one who claims possessionmust give all such details as enumerated hereunder. Theyare only illustrative and not exhaustive.

(a) who is or are the owner or owners of the property;

(b) title of the property;

(c) who is in possession of the title documents

(d) identity of the claimant or claimants to possession;

(e) the date of entry into possession;

(f) how he came into possession - whether hepurchased the property or inherited or got thesame in gift or by any other method;

(g) in case he purchased the property, what is theconsideration; if he has taken it on rent, how muchis the rent, license fee or lease amount;

(h) if taken on rent, license fee or lease - then insiston rent deed, license deed or lease deed;

(i) who are the persons in possession/occupation orotherwise living with him, in what capacity; asfamily members, friends or servants etc.;


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the owner, on what date did he enter into possession, inwhat capacity and in what manner did he conduct hisrelationship with the owner over the years till the date ofsuit. He must also give details on what basis he is claiminga right to continue in possession. Until the pleadings raisea sufficient case, they will not constitute sufficient claim ofdefence.

77. XXXX XXXX XXXX

78. The Court must ensure that pleadings of a case mustcontain sufficient particulars. Insistence on details reducesthe ability to put forward a non-existent or false claim ordefence.

79. In dealing with a civil case, pleadings, title documentsand relevant records play a vital role and that wouldordinarily decide the fate of the case.”

23. We reiterate the immense importance and relevanceof purity of pleadings. The pleadings need to be criticallyexamined by the judicial officers or judges both before issuingthe ad interim injunction and/or framing of issues.

ENTIRE JOURNEY OF A JUDGE IS TO DISCERN THETRUTH

24. The entire journey of a judge is to discern the truth fromthe pleadings, documents and arguments of the parties. Truthis the basis of justice delivery system. This Court in Dalip Singhv. State of U.P. and Others (2010) 2 SCC 114 observed thattruth constitutes an integral part of the justice delivery systemwhich was in vogue in pre-independence era and the peopleused to feel proud to tell truth in the courts irrespective of theconsequences. However, post-independence period has seendrastic changes in our value system.

25. This Court in Maria Margarida Sequeria Fernandes(supra) had an occasion to deal with the same aspect.

According to us, observations in paragraphs 31 to 52 areabsolutely germane as these paragraphs deal with relevantcases which have enormous bearing on the facts of this case,so these paragraphs are reproduced hereunder:-

“31. In this unfortunate litigation, the Court’s seriousendeavour has to be to find out where in fact the truth lies.The truth should be the guiding star in the entire judicialprocess.

32. Truth alone has to be the foundation of justice. Theentire judicial system has been created only to discern andfind out the real truth. Judges at all levels have to seriouslyengage themselves in the journey of discovering the truth.That is their mandate, obligation and bounden duty.

33. Justice system will acquire credibility only when peoplewill be convinced that justice is based on the foundationof the truth.

34. In Mohanlal Shamji Soni v. Union of India 1991 Supp(1) SCC 271, this Court observed that in such a situationa question that arises for consideration is whether thepresiding officer of a Court should simply sit as a mereumpire at a contest between two parties and declare atthe end of the combat who has won and who has lost oris there not any legal duty of his own, independent of theparties, to take an active role in the proceedings in findingthe truth and administering justice? It is a well acceptedand settled principle that a Court must discharge itsstatutory functions-whether discretionary or obligatory-according to law in dispensing justice because it is theduty of a Court not only to do justice but also to ensure thatjustice is being done.

35. What people expect is that the Court should dischargeits obligation to find out where in fact the truth lies. Rightfrom inception of the judicial system it has been accepted


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that discovery, vindication and establishment of truth arethe main purposes underlying the existence of the courtsof justice.

36. In Ritesh Tewari and Another v. State of Uttar Pradeshand Others (2010) 10 SCC 677 this Court reproducedoften quoted quotation which reads as under:

“Every trial is a voyage of discovery in which truthis the quest”

37. This Court observed that the power is to be exercisedwith an object to subserve the cause of justice and publicinterest and for getting the evidence in aid of a justdecision and to uphold the truth.

38. Lord Denning, in the case of Jones v. National CoalBoard [1957] 2 QB 55 has observed that:

“In the system of trial that we evolved in this country,the Judge sits to hear and determine the issuesraised by the parties, not to conduct aninvestigation or examination on behalf of the societyat large, as happens, we believe, in some foreigncountries.”

39. Certainly, the above, is not true of the Indian JudicialSystem. A judge in the Indian System has to be regardedas failing to exercise his jurisdict ion and therebydischarging his judicial duty, if in the guise of remainingneutral, he opts to remain passive to the proceedingsbefore him. He has to always keep in mind that “every trialis a voyage of discovery in which truth is the quest”. Inorder to bring on record the relevant fact, he has to playan active role; no doubt within the bounds of the statutorilydefined procedural law.

40. Lord Denning further observed in the said case ofJones (supra) that “‘It’s all very well to paint justice blind,

but she does better without a bandage round her eyes.She should be blind indeed to favour or prejudice, but clearto see which way lies the truth…”

41. World over, modern procedural Codes are increasinglyrelying on full disclosure by the parties. Managerial powersof the Judge are being deployed to ensure that the scopeof the factual controversy is minimized.

42. In civil cases, adherence to Section 30 CPC wouldalso help in ascertaining the truth. It seems that thisprovision which ought to be frequently used is rarelypressed in service by our judicial officers and judges.Section 30 CPC reads as under:-

30. Power to order discovery and the like. –Subject to such conditions and limitations as maybe prescribed, the Court may, at any time either ofits own motion or on the application of any party, -

(a) make such orders as may be necessary orreasonable in all matters relating to thedelivery and answering of interrogatories, theadmission of documents and facts, and thediscovery, inspection, production,impounding and return of documents or othermaterial objects producible as evidence;

(b) issue summons to persons whose attendanceis required either to give evidence or toproduce documents or such other objects asaforesaid;

(c) order any fact to be proved by affidavit

43. “Satyameva Jayate” (Literally: “Truth Stands Invincible”)is a mantra from the ancient scripture MundakaUpanishad. Upon independence of India, it was adoptedas the national motto of India. It is inscribed in Devanagari


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script at the base of the national emblem. The meaning offull mantra is as follows:

“Truth alone triumphs; not falsehood. Through truththe divine path is spread out by which the sageswhose desires have been completely fulfilled, reachwhere that supreme treasure of Truth resides.”

44. Malimath Committee on Judicial Reforms heavilyrelied on the fact that in discovering truth, the judges of allCourts need to play an active role. The Committeeobserved thus:

2.2……….In the adversarial system truth issupposed to emerge from the respective versionsof the facts presented by the prosecution and thedefence before a neutral judge. The judge acts likean umpire to see whether the prosecution has beenable to prove the case beyond reasonable doubt.The State discharges the obligation to protect life,liberty and property of the citizens by taking suitablepreventive and punitive measures which also servethe object of preventing private retribution soessential for maintenance of peace and law andorder in the society doubt and gives the benefit ofdoubt to the accused. It is the parties that determinethe scope of dispute and decide largely,autonomously and in a selective manner on theevidence that they decide to present to the court.The trial is oral, continuous and confrontational. Theparties use cross-examination of witnesses toundermine the opposing case and to discoverinformation the other side has not brought out. Thejudge in his anxiety to maintain his position ofneutrality never takes any initiative to discover truth.He does not correct the aberrations in theinvestigation or in the matter of production ofevidence before court……..”

2.15 “The Adversarial System lacks dynamismbecause it has no lofty ideal to inspire. It has notbeen entrusted with a positive duty to discover truthas in the Inquisitorial System. When theinvestigation is perfunctory or ineffective, Judgesseldom take any initiative to remedy the situation.During the trial, the Judges do not bother if relevantevidence is not produced and plays a passive roleas he has no duty to search for truth…..”

2.16.9. Truth being the cherished ideal and ethosof India, pursuit of truth should be the guiding starof the Criminal Justice System. For justice to bedone truth must prevail. It is truth that must protectthe innocent and it is truth that must be the basis topunish the guilty. Truth is the very soul of justice.Therefore truth should become the ideal to inspirethe courts to pursue. This can be achieved bystatutorily mandating the courts to become activeseekers of truth. It is of seminal importance to injectvitality into our system if we have to regain the lostconfidence of the people. Concern for and duty toseek truth should not become the limited concernof the courts. It should become the paramount dutyof everyone to assist the court in its quest for truth.

45. In Chandra Shashi v. Anil Kumar Verma (1995) 1SCC 421 to enable the Courts to ward off unjustifiedinterference in their working, those who indulge in immoralacts like perjury, pre-variation and motivated falsehoodshave to be appropriately dealt with, without which it wouldnot be possible for any Court to administer justice in thetrue sense and to the satisfaction of those who approachit in the hope that truth would ultimately prevail. Peoplewould have faith in Courts when they would find that truthalone triumphs in Courts.

46. Truth has been foundation of other judicial systems,


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such as, the United States of America, the United Kingdomand other countries.

47. In James v. Giles et al. v. State of Maryland 386 U.S.66 (1967) 87, S.Ct. 793, the US Supreme Court, in rulingon the conduct of prosecution in suppressing evidencefavourable to the defendants and use of perjured testimonyheld that such rules existed for a purpose as a necessarycomponent of the search for truth and justice that judges,like prosecutors must undertake. It further held that theState’s obligation under the Due Process Clause “is notto convict, but to see that so far as possible, truthemerges.”

48. The obligation to pursue truth has been carried toextremes. Thus, in United States v. J. Lee Havens 446U.S. 620, 100 St.Ct.1912, it was held that the governmentmay use illegally obtained evidence to impeach adefendant’s fraudulent statements during cross-examination for the purpose of seeking justice, for thepurpose of “arriving at the truth, which is a fundamentalgoal of our legal system”.

49. Justice Cardozo in his widely read and appreciatedbook “The Nature of the Judicial Process” discusses therole of the judges. The relevant part is reproduced asunder:-

“There has been a certain lack of candour,” “inmuch of the discussion of the theme [of judges’humanity], or rather perhaps in the refusal to discussit, as if judges must lose respect and confidenceby the reminder that they are subject to humanlimitations.” I do not doubt the grandeur ofconception which lifts them into the realm of purereason, above and beyond the sweep of perturbingand deflecting forces. None the less, if there isanything of reality in my analysis of the judicial

process, they do not stand aloof on these chill anddistant heights; and we shall not help the cause oftruth by acting and speaking as if they do.”

50. Aharon Barak, President of Israeli Supreme Court from1995 to 2006 takes the position that:

“For issues in which stability is actually moreimportant than the substance of the solution – andthere are many such cases – I will join the majority,without restating my dissent each time. Only whenmy dissenting opinion reflects an issue that iscentral for me – that goes to the core of my role asa judge – will I not capitulate, and will I continue torestate my dissenting opinion: “Truth or stability –truth is preferable”.

“On the contrary, public confidence means rulingaccording to the law and according to the judge’sconscience, whatever the attitude of the public maybe. Public confidence means giving expression tohistory, not to hysteria. Public confidence is ensuredby the recognition that the judge is doing justicewithin the framework of the law and its provisions.Judges must act – inside and outside the court –in a manner that preserves public confidence inthem. They must understand that judging is notmerely a job but a way of life. It is a way of life thatdoes not include the pursuit of material wealth orpublicity; it is a way of life based on spiritual wealth;it is a way of life that includes an objective andimpartial search for truth.”

51. In the administration of justice, judges and lawyers playequal roles. Like judges, lawyers also must ensure that truthtriumphs in the administration of justice.

52. Truth is the foundation of justice. It must be the


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the controversy. Rule 2 of Order X reads as under:-

“2. Oral examination of party, or companion of party. – (1)At the first hearing of the suit, the Court -

(a) shall, with a view to elucidating matters incontroversy in the suit, examine orally such of theparties to the suit appearing in person or presentin Court, as it deems fit; and

(b) may orally examine any person, able to answer anymaterial question relating to the suit, by whom anyparty appearing in person or present in Court or hispleader is accompanied.

(2) xxx xxx xxx

(3) xxx xxx xxx

31. It is a useful procedural device and must be regularlypressed into service. As per Rule 2 (3) of Order X CPC,the Court may if it thinks fit, put in the course of suchexamination questions suggested by either party. Rule 2(3) of Order X CPC reads as under:-

“2. (1) xxx xxx xxx

(2) xxx xxx xxx

(3) The Court may, if it thinks fit, put in the course ofan examination under this rule questions suggested byeither party.”

32. If issues are properly framed, the controversy in thecase can be clearly focused and documents can be properlyappreciated in that light. The relevant evidence can also becarefully examined. Careful framing of issues also helps inproper examination and cross-examination of witnesses andfinal arguments in the case.

endeavour of all the judicial officers and judges toascertain truth in every matter and no stone should be leftunturned in achieving this object. Courts must give greateremphasis on the veracity of pleadings and documents inorder to ascertain the truth.”

26. As stated in the preceding paragraphs, the pleadingsare foundation of litigation but experience reveals that sufficientattention is not paid to the pleadings and documents by thejudicial officers before dealing with the case. It is the boundenduty and obligation of the parties to investigate and satisfythemselves as to the correctness and the authenticity of thematter pleaded.

27. The pleadings must set-forth sufficient factual detailsto the extent that it reduces the ability to put forward a false orexaggerated claim or defence. The pleadings must inspireconfidence and credibility. If false averments, evasive denialsor false denials are introduced, then the Court must carefullylook into it while deciding a case and insist that those whoapproach the Court must approach it with clean hands.

28. It is imperative that judges must have complete gripof the facts before they start dealing with the case. That wouldavoid unnecessary delay in disposal of the cases.

29. Ensuring discovery and production of documents anda proper admission/denial is imperative for deciding civil casesin a proper perspective. In relevant cases, the Courts shouldencourage interrogatories to be administered.

FRAMING OF ISSUES

30. Framing of issues is a very important stage of a civiltrial. It is imperative for a judge to critically examine thepleadings of the parties before framing of issues. Rule 2 ofOrder X CPC enables the Court, in its search for the truth, togo to the core of the matter and narrow down, or even eliminate


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GRANT OR REFUSAL OF INJUNCTION

33. In Maria Margarida Sequeria Fernandes (supra), thisCourt examined the importance of grant or refusal of aninjunction in paras 86 to 89 which read as under:-

“86. Grant or refusal of an injunction in a civil suit is themost important stage in the civil trial. Due care, caution,diligence and attention must be bestowed by the judicialofficers and judges while granting or refusing injunction. Inmost cases, the fate of the case is decided by grant orrefusal of an injunction. Experience has shown that oncean injunction is granted, getting it vacated would becomea nightmare for the defendant. In order to grant or refuseinjunction, the judicial officer or the judge must carefullyexamine the entire pleadings and documents with utmostcare and seriousness.

87. The safe and better course is to give short notice oninjunction application and pass an appropriate order afterhearing both the sides. In case of grave urgency, if itbecomes imperative to grant an ex-parte ad interiminjunction, it should be granted for a specified period, suchas, for two weeks. In those cases, the plaintiff will have noinherent interest in delaying disposal of injunctionapplication after obtaining an ex-parte ad interiminjunction. The Court, in order to avoid abuse of theprocess of law may also record in the injunction order thatif the suit is eventually dismissed, the plaintiff undertakesto pay restitution, actual or realistic costs. While passingthe order, the Court must take into consideration thepragmatic realities and pass proper order for mesneprofits. The Court must make serious endeavour to ensurethat even-handed justice is given to both the parties.

88. Ordinarily, three main principles govern the grant orrefusal of injunction.

(a) prima facie case;

(b) balance of convenience; and

(c) irreparable injury, which guide the Court in thisregard.

89. In the broad category of prima facie case, it isimperative for the Court to carefully analyse the pleadingsand the documents on record and only on that basis theCourt must be governed by the prima facie case. In grantand refusal of injunction, pleadings and documents playvital role.”

RESTITUTION AND MESNE PROFITS

34. Experience reveals that a large number of cases arefiled on false claims or evasive pleas are introduced by thedefendant to cause delay in the administration of justice andthis can be sufficiently taken care of if the Courts adopt realisticapproach granting restitution. This Court in the case ofRamrameshwari Devi v. Nirmala Devi (2011) 8 SCC 249 (ofwhich one of us, Bhandari, J. was the author of the judgment)in paragraph 52 (C, D and G) of the judgment dealt with theaspect of imposition of actual or realistic costs which are equallyrelevant for this case reads as under:-

“C. Imposition of actual, realistic or proper costs andor ordering prosecution would go a long way incontrolling the tendency of introducing falsepleadings and forged and fabricated documents bythe litigants. Imposition of heavy costs would alsocontrol unnecessary adjournments by the parties. Inappropriate cases the courts may considerordering prosecution otherwise it may not bepossible to maintain purity and sanctity of judicialproceedings.

D. The Court must adopt realistic and pragmatic


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approach in granting mesne profits. The Court mustcarefully keep in view the ground realities whilegranting mesne profits.

G. The principle of restitution be fully applied in apragmatic manner in order to do real andsubstantial justice.”

35. Unless wrongdoers are denied profit or undue benefitfrom frivolous litigations, it would be difficult to control frivolousand uncalled for litigations. Experience also reveals that ourCourts have been very reluctant to grant the actual or realisticcosts. We would like to explain this by giving this illustration.When a litigant is compelled to spend Rs.1 lac on a frivolouslitigation there is hardly any justification in awarding Rs. 1,000/- as costs unless there are special circumstances of that case.We need to decide cases while keeping pragmatic realities inview. We have to ensure that unscrupulous litigant is notpermitted to derive any benefit by abusing the judicial process.

36. This Court in another important case in Indian Councilfor Enviro-Legal Action v. Union of India and Others (2011) 8SCC 161 (of which one of us, Bhandari, J. was the author ofthe judgment) had an occasion to deal with the concept ofrestitution. The relevant paragraphs of that judgment dealingwith relevant judgments are reproduced hereunder:-

193. This Court in Grindlays Bank Limited v. Income TaxOfficer, Calcutta (1980) 2 SCC 191 observed as under :-

“…When passing such orders the High Court drawson its inherent power to make all such orders as arenecessary for doing complete justice between theparties. The interests of justice require that anyundeserved or unfair advantage gained by a partyinvoking the jurisdiction of the court, by the merecircumstance that it has initiated a proceeding inthe court, must be neutralised. The simple fact of

the institution of litigation by itself should not bepermitted to confer an advantage on the partyresponsible for it. …”

194. In Ram Krishna Verma and Others v. State of U.P.and Others (1992) 2 SCC 620 this Court observed asunder :-

“The 50 operators including the appellants/ privateoperators have been running their stage carriages byblatant abuse of the process of the court by delaying thehearing as directed in Jeevan Nath Bahl’s case and theHigh Court earlier thereto. As a fact, on the expiry of theinitial period of grant after Sept. 29, 1959 they lost the rightto obtain renewal or to ply their vehicles, as this Courtdeclared the scheme to be operative. However, by sheerabuse of the process of law they are continuing to ply theirvehicles pending hearing of the objections. This Court inGrindlays Bank Ltd. vs Income-tax Officer - [1990] 2 SCC191 held that the High Court while exercising its powerunder Article 226 the interest of justice requires that anyundeserved or unfair advantage gained by a party invokingthe jurisdiction of the court must be neutralised. It wasfurther held that the institution of the litigation by it shouldnot be permitted to confer an unfair advantage on the partyresponsible for it. In the light of that law and in view of thepower under Article 142(1) of the Constitution this Court,while exercising its jurisdiction would do complete justiceand neutralise the unfair advantage gained by the 50operators including the appellants in dragging the litigationto run the stage carriages on the approved route or areaor portion thereof and forfeited their right to hearing of theobjections filed by them to the draft scheme dated Feb.26, 1959. …”

195. This Court in Kavita Trehan vs Balsara HygieneProducts (1994) 5 SCC 380 observed as under :-


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“The jurisdiction to make restitution is inherent inevery court and will be exercised whenever thejustice of the case demands. It will be exercisedunder inherent powers where the case did notstrictly fall within the ambit of Section 144. Section144 opens with the words “Where and in so far asa decree or an order is varied or reversed in anyappeal, revision or other proceeding or is set asideor modified in any suit instituted for the purpose, ...”.The instant case may not strictly fall within the termsof Section 144; but the aggrieved party in such acase can appeal to the larger and general powersof restitution inherent in every court.”

196. This Court in Marshall Sons & Co. (I) Ltd. v. SahiOretrans (P) Ltd. and Another (1999) 2 SCC 325observed as under :-

“From the narration of the facts, though it appearsto us, prima facie, that a decree in favour of theappellant is not being executed for some reason orthe other, we do not think it proper at this stage todirect the respondent to deliver the possession tothe appellant since the suit filed by the respondentis still pending. It is true that proceedings aredragged for a long time on one count or the otherand on occasion become highly technicalaccompanied by unending prolixity, at every stageproviding a legal trap to the unwary. Because of thedelay unscrupulous parties to the proceedings takeundue advantage and person who is in wrongfulpossession draws delight in delay in disposal of thecases by taking undue advantage of proceduralcomplications. It is also known fact that afterobtaining a decree for possession of immovableproperty, its execution takes long time. In such asituation for protecting the interest of judgment

creditor, it is necessary to pass appropriate orderso that reasonable mesne profit which may beequivalent to the market rent is paid by a personwho is holding over the property. In appropriatecases, Court may appoint Receiver and direct theperson who is holding over the property to act asan agent of the Receiver with a direction to depositthe royalty amount fixed by the Receiver or passsuch other order which may meet the interest ofjustice. This may prevent further injury to the plaintiffin whose favour decree is passed and to protectthe property including further alienation.”

197. In Padmawati v. Harijan Sewak Sangh - CM (Main)No.449 of 2002 decided by the Delhi high Court on6.11.2008, the court held as under:-

“The case at hand shows that frivolous defencesand frivolous litigation is a calculated ventureinvolving no risks situation. You have only to engageprofessionals to prolong the litigation so as todeprive the rights of a person and enjoy the fruitsof illegalities. I consider that in such cases whereCourt finds that using the Courts as a tool, a litiganthas perpetuated illegalities or has perpetuated anillegal possession, the Court must impose costs onsuch litigants which should be equal to the benefitsderived by the litigant and harm and deprivationsuffered by the rightful person so as to check thefrivolous litigation and prevent the people fromreaping a rich harvest of illegal acts through theCourt. One of the aims of every judicial system hasto be to discourage unjust enrichment using Courtsas a tool. The costs imposed by the Courts mustin all cases should be the real costs equal todeprivation suffered by the rightful person.”

198. We approve the findings of the High Court of Delhi


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in the aforementioned case.

199. The Court also stated “Before parting with this case,we consider it necessary to observe that one of the mainreasons for over-flowing of court dockets is the frivolouslitigation in which the Courts are engaged by the litigantsand which is dragged as long as possible. Even if theselitigants ultimately loose the lis, they become the realvictors and have the last laugh. This class of people whoperpetuate illegal acts by obtaining stays and injunctionsfrom the Courts must be made to pay the sufferer not onlythe entire illegal gains made by them as costs to theperson deprived of his right and also must be burdenedwith exemplary costs. Faith of people in judiciary can onlybe sustained if the persons on the right side of the law donot feel that even if they keep fighting for justice in the Courtand ultimately win, they would turn out to be a fool sincewinning a case after 20 or 30 years would makewrongdoer as real gainer, who had reaped the benefits forall those years. Thus, it becomes the duty of the Courts tosee that such wrongdoers are discouraged at every stepand even if they succeed in prolonging the litigation dueto their money power, ultimately they must suffer the costsof all these years long litigation. Despite settled legalpositions, the obvious wrong doers, use one after anothertier of judicial review mechanism as a gamble, knowingfully well that dice is always loaded in their favour, sinceeven if they lose, the time gained is the real gain. Thissituation must be redeemed by the Courts”.

200. Against this judgment, Special Leave to Appeal(Civil) No 29197/2008 was preferred to this Court. TheCourt passed the following order:

“We have heard learned counsel appearing for theparties. We find no ground to interfere with the well-considered judgment passed by the High Court. TheSpecial Leave Petition is, accordingly, dismissed.”

208. In Marshall sons and Company (I) Limited v. SahiOretrans (P) Limited and Another (1999) 2 SCC 325 thisCourt in para 4 of the judgment observed as under:

“…It is true that proceedings are dragged for a longtime on one count or the other and, on occasion,become highly technical accompanied by unendingprolixity at every stage providing a legal trap to theunwary. Because of the delay, unscrupulous partiesto the proceedings take undue advantage and aperson who is in wrongful possession draws delightin delay in disposal of the cases by taking undueadvantage of procedural complications. It is also aknown fact that after obtaining a decree forpossession of immovable property, its executiontakes a long time. In such a situation, for protectingthe interest of the judgment-creditor, it is necessaryto pass appropriate orders so that reasonablemesne profit which may be equivalent to the marketrent is paid by a person who is holding over theproperty. In appropriate cases, the court mayappoint a Receiver and direct the person who isholding over the property to act as an agent of theReceiver with a direction to deposit the royaltyamount fixed by the Receiver or pass such otherorder which may meet the interest of justice. Thismay prevent further injury to the plaintiff in whosefavour the decree is passed and to protect theproperty including further alienation. …”

209. In Ouseph Mathai and Others v. M. Abdul Khadir(2002) 1 SCC 319 this Court reiterated the legal positionthat the stay granted by the Court does not confer a rightupon a party and it is granted always subject to the finalresult of the matter in the Court and at the risk and costsof the party obtaining the stay. After the dismissal, of thelis, the party concerned is relegated to the position which


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existed prior to the filing of the petition in the Court whichhad granted the stay. Grant of stay does not automaticallyamount to extension of a statutory protection.

210. This Court in South Eastern Coalfields Limited v.State of M.P. and others (2003) 8 SCC 648 on examiningthe principle of restitution in para 26 of the judgmentobserved as under:

“In our opinion, the principle of restitution takes careof this submission. The word “restitution” in itsetymological sense means restoring to a party onthe modification, variation or reversal of a decreeor order, what has been lost to him in execution ofdecree or order of the court or in directconsequence of a decree or order (see ZafarKhan v. Board of Revenue, U.P - (1984) SuppSCC 505) In law, the term “restitution” is used inthree senses: (i) return or restoration of somespecific thing to its rightful owner or status; (ii)compensation for benefits derived from a wrongdone to another; and (iii) compensation orreparation for the loss caused to another.”

211. The Court in para 28 of the aforesaid judgment verycarefully mentioned that the litigation should not turn intoa fruitful industry and observed as under:

“… … …Litigation may turn into a fruitful industry.Though litigation is not gambling yet there is anelement of chance in every litigation. Unscrupulouslitigants may feel encouraged to approach thecourts, persuading the court to pass interlocutoryorders favourable to them by making out a primafacie case when the issues are yet to be heard anddetermined on merits and if the concept ofrestitution is excluded from application to interimorders, then the litigant would stand to gain by

swallowing the benefits yielding out of the interimorder even though the battle has been lost at theend. This cannot be countenanced. We are,therefore, of the opinion that the successful partyfinally held entitled to a relief assessable in termsof money at the end of the litigation, is entitled tobe compensated by award of interest at a suitablereasonable rate for the period for which the interimorder of the court withholding the release of moneyhad remained in operation.”

212. The Court in the aforesaid judgment also observedthat once the doctrine of restitution is attracted, the interestis often a normal relief given in restitution. Such interest isnot controlled by the provisions of the Interest Act of 1839or 1978.

213. In a relatively recent judgment of this Court inAmarjeet Singh and Others v. Devi Ratan and Others(2010) 1 SCC 417 the Court in para 17 of the judgmentobserved as under:

“No litigant can derive any benefit from merependency of case in a court of law, as the interimorder always merges in the final order to be passedin the case and if the writ petition is ultimatelydismissed, the interim order stands nullifiedautomatically. A party cannot be allowed to take anybenefit of its own wrongs by getting an interim orderand thereafter blame the court. The fact that the writis found, ultimately, devoid of any merit, shows thata frivolous writ petition had been filed. The maximactus curiae neminem gravabit, which means thatthe act of the court shall prejudice no one, becomesapplicable in such a case. In such a fact situationthe court is under an obligation to undo the wrongdone to a party by the act of the court. Thus, any


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object and true meaning of the concept of restitution cannotbe achieved or accomplished unless the courts adopt apragmatic approach in dealing with the cases.

218. This Court in a very recent case RamrameshwariDevi and Others v. Nirmala Devi and Others 2011(6)Scale 677 had an occasion to deal with similar questionsof law regarding imposition of realistic costs andrestitution. One of us (Bhandari, J.) was the author of thejudgment. It was observed in that case as under:

“While imposing costs we have to take intoconsideration pragmatic realities and be realisticwhat the defendants or the respondents had toactually incur in contesting the litigation beforedifferent courts. We have to also broadly take intoconsideration the prevalent fee structure of thelawyers and other miscellaneous expenses whichhave to be incurred towards drafting and filing ofthe counter affidavit, miscellaneous chargestowards typing, photocopying, court fee etc.

The other factor which should not be forgotten whileimposing costs is for how long the defendants orrespondents were compelled to contest and defendthe litigation in various courts. The appellants in theinstant case have harassed the respondents to thehilt for four decades in a totally frivolous anddishonest litigation in various courts. The appellantshave also wasted judicial time of the various courtsfor the last 40 years.”

37. False averments of facts and untenable contentionsare serious problems faced by our courts. The other problemis that litigants deliberately create confusion by introducingirrelevant and minimally relevant facts and documents. The courtcannot reject such claims, defences and pleas at the first look.It may take quite sometime, at times years, before the court is

undeserved or unfair advantage gained by a partyinvoking the jurisdiction of the court must beneutralised, as the institution of litigation cannot bepermitted to confer any advantage on a suitor fromdelayed action by the act of the court. … …”

215. In consonance with the concept of restitution, it wasobserved that courts should be careful and pass an orderneutralizing the effect of all consequential orders passedin pursuance of the interim orders passed by the court.Such express directions may be necessary to check therising trend among the litigants to secure the relief as aninterim measure and then avoid adjudication on merits.

216. In consonance with the principle of equity, justice andgood conscience judges should ensure that the legalprocess is not abused by the litigants in any manner. Thecourt should never permit a litigant to perpetuate illegalityby abusing the legal process. It is the bounden duty of thecourt to ensure that dishonesty and any attempt to abusethe legal process must be effectively curbed and the courtmust ensure that there is no wrongful, unauthorized orunjust gain for anyone by the abuse of the process of thecourt. One way to curb this tendency is to impose realisticcosts, which the respondent or the defendant has in factincurred in order to defend himself in the legalproceedings. The courts would be fully justified evenimposing punitive costs where legal process has beenabused. No one should be permitted to use the judicialprocess for earning undeserved gains or unjust profits. Thecourt must effectively discourage fraudulent, unscrupulousand dishonest litigation.

217. The court’s constant endeavour must be to ensurethat everyone gets just and fair treatment. The court whilerendering justice must adopt a pragmatic approach andin appropriate cases realistic costs and compensation beordered in order to discourage dishonest litigation. The


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able to see through, discern and reach to the truth. More oftenthan not, they appear attractive at first blush and only on adeeper examination the irrelevance and hollowness of thosepleadings and documents come to light.

38. Our courts are usually short of time because of hugependency of cases and at times the courts arrive at anerroneous conclusion because of false pleas, claims, defencesand irrelevant facts. A litigant could deviate from the facts whichare liable for all the conclusions. In the journey of discoveringthe truth, at times, this Court, on later stage, but oncediscovered, it is the duty of the Court to take appropriateremedial and preventive steps so that no one should derivebenefits or advantages by abusing the process of law. The courtmust effectively discourage fraudulent and dishonest litigants.

39. Now, when we revert to the facts of this case itbecomes quite evident that the appellant is guilty of suppressingmaterial facts and introducing false pleas and irrelevantdocuments. The appellant has also clouded the entire case withpleas which have nothing to do with the main controversyinvolved in the case.

IRRELEVANT DOCUMENTS:

40. All documents filed by the appellant along with theplaint have no relevance to the controversy involved in the case.We have reproduced a list of the documents to demonstratethat these documents have been filed to mislead the Court. TheFirst Appellate Court has, in fact, got into the trap and wasmisled by the documents and reached to an entirely erroneousfinding that resulted in undue delay of disposal of a small casefor almost 17 years.

FALSE AND IRRELEVANT PLEAS:

41. The appellant is also guilty of introducing untenablepleas. The plea of adverse possession which has no foundationor basis in the facts and circumstances of the case was

introduced to gain undue benefit. The Court must be cautiousin granting relief to a party guilty of deliberately introducingirrelevant and untenable pleas responsible for creatingunnecessary confusion by introducing such documents andpleas. These factors must be taken into consideration whilegranting relief and/or imposing the costs.

42. On the facts of the present case, following principlesemerge:

1. It is the bounden duty of the Court to uphold the truthand do justice.

2. Every litigant is expected to state truth before thelaw court whether it is pleadings, affidavits orevidence. Dishonest and unscrupulous litigantshave no place in law courts.

3. The ultimate object of the judicial proceedings is todiscern the truth and do justice. It is imperative thatpleadings and all other presentations before thecourt should be truthful.

4. Once the court discovers falsehood, concealment,distortion, obstruction or confusion in pleadings anddocuments, the court should in addition to fullrestitution impose appropriate costs. The courtmust ensure that there is no incentive for wrong doerin the temple of justice. Truth is the foundation ofjustice and it has to be the common endeavour ofall to uphold the truth and no one should bepermitted to pollute the stream of justice.

5. It is the bounden obligation of the Court to neutralizeany unjust and/or undeserved benefit or advantageobtained by abusing the judicial process.

6. Watchman, caretaker or a servant employed tolook after the property can never acquire interest in

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117A. SHANMUGAM v. ARIYA K.R.V.M.N.P. SANGAM REP. BYITS PRESIDENT ETC. [DALVEER BHANDARI, J.]

the property irrespective of his long possession.The watchman, caretaker or a servant is under anobligation to hand over the possession forthwith ondemand. According to the principles of justice,equity and good conscience, Courts are notjustif ied in protecting the possession of awatchman, caretaker or servant who was onlyallowed to live into the premises to look after thesame.

7. The watchman, caretaker or agent holds theproperty of the principal only on behalf the principal.He acquires no right or interest whatsoever in suchproperty irrespective of his long stay or possession.

8. The protection of the Court can be granted orextended to the person who has valid subsistingrent agreement, lease agreement or licenceagreement in his favour.

43. In the instant case, we would have ordinarily imposedheavy costs and would have ordered restitution but looking tothe fact that the appellant is a Watchman and may not be ableto bear the financial burden, we dismiss these appeals withvery nominal costs of Rs. 25,000/- to be paid within a periodof two months and direct the appellant to vacate the premiseswithin two months from today and handover peacefulpossession of the suit property to the respondent-Society. Incase, the appellant does not vacate the premises within twomonths from today, the respondent-Society would be a libertyto take police help and get the premises vacated.

44. Both the appeals are, accordingly dismissed, leavingthe parties to bear their own costs.

K.K.T. Appeals dismissed.

U.P. POWER CORPORATION LTD.v.

RAJESH KUMAR & ORS.(Civil Appeal No. 2608 of 2011 etc.)

APRIL 27, 2012

[DALVEER BHANDARI AND DIPAK MISRA, JJ.]

Constitution of India, 1950:

Arts. 16(1), 16(4), 16(4A) and 16(4B) – Reservation inpromotion – Consequential/Accelerated seniority – Principlesemerging from M. Nagraj – Culled out – Held: Articles 16(4A)and 16(4B) are enabling provisions and the State can makethe provisions for the same on certain basis or foundation –In the instant case, the conditions precedent have not beensatisfied – No exercise as per decision in M. Nagraj has beenundertaken – Therefore, s.3(7) of the 1994 Act and r.8-A ofthe Rules are ultra vires as they run counter to the dictum inM. Nagraj – Uttar Pradesh Public Servants (Reservation forScheduled Castes, Scheduled Tribes and other BackwardClasses) Act, 1994 – s. 3(7) – Uttar Pradesh GovernmentServants Seniority Rules, 1991 – r.8-A as inserted by UttarPradesh Government Servants Seniority (Third Amendment)Rules, 2007.

Judicial Discipline:

On a similar issue cases being heard by Lucknow Benchof Allahabad High Court – Another Division Bench atAllahabad entertained and decided a writ petition involving thesame issue – Division Bench at Lucknow holding the saiddecision as per incurium – Held: When Allahabad Bench wasapprised about the number of matters at Lucknow filed earlierin point of time which were being part heard and the hearingwas in continuum, it would have been advisable to wait for the

[2012] 4 S.C.R. 118

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119 120U.P. POWER CORPORATION LTD. v. RAJESHKUMAR & ORS.

verdict at Lucknow Bench or to bring it to the notice of theChief Justice about the similar matters being instituted at boththe places – The judicial courtesy and decorum warrantedsuch discipline which was expected from the Judges –Similarly, the Division Bench at Lucknow erroneously treatedthe verdict of Allahabad Bench as per incuriam or not abinding precedent – Judicial discipline commands in such asituation when there is disagreement, to refer the matter to alarger Bench.

Writ petitions were filed before the Lucknow Benchof the Allahabad High Court challenging r.8-A as insertedby the U.P. Government Servants Seniority (3rdAmendment) Rules, 2007, in the U.P. GovernmentServants Seniority Rules, 1991. The assail was also to theconstitutional validity of s. 3(7) of the Uttar PradeshPublic Servants (Reservation for Scheduled Castes,Scheduled Tribes and other Backward Classes) Act,1994. It was the case of the writ petitioners that the StateGovernment in gross violation of the constitutionalprovisions enshrined under Arts. 16(4A) and 16(4B) of theConstitution of India and the interpretation placedthereon by the Constitution Bench in M. Nagraj1 framedthe Rules and the U.P. Power Corporation adopted thesame by amending its Rules and introduced the conceptof reservation in promotion with accelerated seniority. Itwas contended before the Lucknow Bench that neitherthe State Government nor the Corporation had carried outthe exercise as per the decision in M. Nagraj and in theabsence of the same, the provisions of the Act and theRules caused discomfort to the constitutional provisions.While the said writ petitions were pending and werebeing dealt with on merit by a Division Bench at Lucknow,another Division Bench of the High Court at Allahabadentertained and decided writ petition No. 63217 of 2010

(Mukund Kumar Srivastava vs. State of U.P. and Another)upholding the validity of the provisions contained in r.8Aof the 1991 Rules. However, when the said decision wasbrought to the notice of the Division Bench at Lucknow,the said Bench, in Writ Petition no. 1389 (S/B) of 2007(Prem Kumar Singh and others v. State of U.P. and others),held that the decision in Mukund Kumar Srivastava was perincurium and that s.3(7) of the 1994 Act and r.8-A of 1991Rules were invalid, ultra vires and unconstitutional. Itquashed the orders relating to seniority passed by theState Government and clarified that in case the StateGovernment undertook to provide reservation inpromotion to any class or classes of posts in the servicesunder the State, it could do so after undertaking theexercise as required under the constitutional provisionsin accordance with law laid down by this Court in M.Nagraj. The instant appeals were filed challenging boththe judgments.

Disposing of the appeals, the Court

HELD: 1.1 The Allahabad Bench was apprised aboutthe number of matters at Lucknow filed earlier in point oftime which were being part heard and the hearing wasin continuum. It would have been advisable to wait forthe verdict at Lucknow Bench or to bring it to the noticeof the Chief Justice about the similar matters beinginstituted at both the places. The judicial courtesy anddecorum warranted such discipline which was expectedfrom the Judges. Similarly, the Division Bench atLucknow erroneously treated the verdict of AllahabadBench not to be a binding precedent on the foundationthat the principles laid down by the Constitution Benchin M. Nagraj* are not being appositely appreciated andcorrectly applied by the Bench when there was referenceto the said decision and number of passages werequoted and appreciated albeit incorrectly, the same could

1. M. Nagaraj v. Union of India 2006 (7) Suppl. SCR 336.


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not have been a ground to treat the decision as perincuriam or not a binding precedent. Judicial disciplinecommands in such a situation when there isdisagreement to refer the matter to a larger Bench.Instead of doing that, the Division Bench at Lucknowtook the burden on themselves to decide the case. Thereare two decisions by two Division Benches from thesame High Court. This Court expresses its concernabout the deviation from the judicial decorum anddiscipline by both the Benches and expect that in future,they shall be appositely guided by the conceptualeventuality of such discipline as laid down by this Courtfrom time to time. [para 12 and 14] [137-B-F; 138-G-H; 139-A]

Lala Shri Bhagwan and another v. Ram Chand andanother 1965 SCR 218 =AIR 1965 SC 1767; and SundarjasKanyalal Bhathija and others v. The Collector, Thane,Maharashtra and others AIR 1991 SC 1893 – relied on.

2.1 It is axiomatic in service jurisprudence that anypromotions made wrongly in excess of any quota are tobe treated as ad hoc. This applies to reservation quotaas much as it applies to direct recruits and promoteecases. If a court decides that in order only to removehardship such roster-point promotees are not to facereversions, then it would be necessary to hold –consistent with Arts. 14 and 16(1) – that such promoteescannot plead for grant of any additional benefit ofseniority flowing from a wrong application of the roster.While courts can relieve immediate hardship arising outof a past illegality, courts cannot grant additional benefitslike seniority which have no element of immediatehardship. [para 20] [146-D-F]

Ajit Singh and others (II) v. State of Punjab and others1999 (2) Suppl. SCR 521 = 1999 (7) SCC 209; and Unionof India and others v. Virpal Singh Chauhan and others 1995(4) Suppl. SCR 158 = 1995 (6) SCC 684 – relied on

Indra Sawhney etc. v. Union of India and others 1992 (2) Suppl. SCR 454 =1992 Supp. (3) SCC 217 : AIR 1993 SC477; General Manager, S. Rly. v. Rangachari 1962 AIR 36 =1962 SCR 586 = State of Punjab v. Hira Lal 1971 (3) SCR 267 = 1970 (3) SCC 567; Akhil Bharatiya Soshit KaramchariSangh v. Union of India 1981 (2) SCR 185 = 1981 (1) SCC 246 and Comptroller and Auditor General v. K.S.Jagannathan 1986 (2) SCR 17 = 1986 (2) SCC 679; R.K.Sabharwal v. State of Punjab 1995 (2) SCR 35 = 1995 (2) SCC 745; Ajit Singh Januja and others v. State of Punjaband others 1996 (3) SCR 125 = 1996 (2) SCC 715; JagdishLal and others v. State of Haryana and others 1997 AIR 2366– referred to.

2.2 Arts. 16(4A) and 16 (4B) were inserted in theConstitution to confer promotion with consequentialseniority and introduced the concept of carrying forwardvacancies treating the vacancies meant for reservedcategory candidates as a separate class of vacancies.The validity of the said Articles were challenged under Art.32 before this Court and the Constitution Bench in M.Nagraj upheld the validity of the said Articles with certainqualifiers/riders by taking recourse to the process ofinterpretation. [para 21, 22] [147-B; 148-G]

M. Nagaraj v. Union of India 2006 (7) Suppl. SCR 336= (2006) 8 SCC 212 : AIR 2007 SC 71 – relied upon

Avinash Singh Bagri and Ors. v. Registrar IIT Delhi andAnother 2009 (13) SCR 258 = 2009 (8) SCC 220; AshokKumar Thakur v. Union of India 2008 (4) SCR 1 = 2008 (6) SCC 1; E. V. Chinniah v. State of Andhra Pradesh 2004(5) Suppl. SCR 972 = 2005 (1) SCC 394; Suraj BhanMeena and Another v. State of Rajasthan & Ors. 2010 (14)SCR 532 = 2011 (1) SCC 467; Barium Chemicals v.Company Law Board 1971 (3) SCR 267 = 1970 (3) SCC 567; Union of India v. Rakesh Kumar 2010 (1) SCR 483 =2010 (4) SCC 50; Ashok Kumar Thakur v. Union of India and


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others 2008 (4) SCR 1 = 2008 (6) SCC 1 – referred to.

2.4 From the decision in M. Nagraj, the principles thatemerge are: (i) Vesting of the power by an enablingprovision may be constitutionally valid and yet ‘exerciseof power’ by the State in a given case may be arbitrary,particularly, if the State fails to identify and measurebackwardness and inadequacy keeping in mind theefficiency of service as required under Article 335; (ii) Art.16(4) which protects the interests of certain sections ofthe society has to be balanced against Art. 16(1) whichprotects the interests of every citizen of the entire society.They should be harmonized because they arerestatements of the principle of equality under Art. 14; (iii)Each post gets marked for the particular category ofcandidates to be appointed against it and anysubsequent vacancy has to be filled by that categorycandidate; (iv) The appropriate Government has to applythe cadre strength as a unit in the operation of the rosterin order to ascertain whether a given class/group isadequately represented in the service. The cadre strengthas a unit also ensures that the upper ceiling-limit of 50%is not violated. Further, roster has to be post-specific andnot vacancy based; (v) The State has to form its opinionon the quantifiable data regarding adequacy ofrepresentation. Clause (4A) of Art. 16 is an enablingprovision. It gives freedom to the State to provide forreservation in matters of promotion. Clause (4A) of Art.16 applies only to SCs and STs. The said clause is carvedout of Art. 16(4). Therefore, Clause (4A) will be governedby the two compelling reasons – “backwardness” and“inadequacy of representation”, as mentioned in Art.16(4). If the said two reasons do not exist, then theenabling provision cannot be enforced; (vi) If the ceiling-limit on the carry-over of unfilled vacancies is removed,the other alternative time-factor comes in and in thatevent, the time-scale has to be imposed in the interest of

efficiency in administration as mandated by Art. 335. If thetime-scale is not kept, then posts will continue to remainvacant for years which would be detrimental to theadministration. Therefore, in each case, the appropriateGovernment will now have to introduce the durationdepending upon the fact-situation; (vii) If the appropriateGovernment enacts a law providing for reservationwithout keeping in mind the parameters in Art. 16(4) andArt. 335, then this Court will certainly set aside and strikedown such legislation; (viii) The constitutional limitationunder Art. 335 is relaxed and not obliterated. Be itreservation or evaluation, excessiveness in either wouldresult in violation of the constitutional mandate. Thisexercise, however, will depend on the facts of each case;(ix) The concepts of efficiency, backwardness andinadequacy of representation are required to be identifiedand measured. That exercise depends on the availabilityof data. That exercise depends on numerous factors. Itis for this reason that the enabling provisions arerequired to be made because each competing claimseeks to achieve certain goals. How best one shouldoptimize these conflicting claims can only be done by theadministration in the context of local prevailingconditions in public employment; and (x) Art. 16(4),therefore, creates a field which enables a State to providefor reservation provided there exists backwardness of aclass and inadequacy of representation in employment.These are compelling reasons. They do not exist in Art.16(1). It is only when these reasons are satisfied that aState gets the power to provide for reservation in thematter of employment. [para 38] [168-E-H; 169-A-H; 170-A-G]

2.5 There may be statutory rules or executiveinstructions to grant promotion but it cannot be forgottenthat they are all subject to the pronouncement by thisCourt in Vir Pal Singh Chauhan and Ajit Singh (II) . This


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Court is of the firm view that a fresh exercise in the lightof the judgment of the Constitution Bench in M. Nagarajis a categorical imperative. The stand that theconstitutional amendments have facilitated thereservation in promotion with consequential seniority andhave given the stamp of approval to the Act and the Rulescannot withstand close scrutiny inasmuch as theConstitution Bench has clearly opined that Arts. 16(4A)and 16(4B) are enabling provisions and the State canmake provisions for the same on certain basis orfoundation. The conditions precedent have not beensatisfied. No exercise has been undertaken. It cannot beignored on the ground that the concept of reservation inpromotion was already in vogue. When the provisions ofthe Constitution are treated valid with certain conditionsor riders, it becomes incumbent on the part of the Stateto appreciate and apply the test so that its amendmentscan be tested and withstand the scrutiny on parameterslaid down therein. [para 41] [172-F-H; 173-A-C]

3. This Court concludes and holds that s.3(7) of the1994 Act and r. 8A of the 1991 Rules, as inserted by the3rd Amendment Rules, 2007, are ultra vires as they runcounter to the dictum in M. Nagaraj. Any promotion thathas been given on the dictum of Indra Sawhney andwithout the aid or assistance of s. 3(7) and r. 8A shallremain undisturbed. [para 42] [173-D]

Case Law Reference:

2006 (7) Suppl. SCR 336 relied on para 2

1992 (2) Suppl. SCR 454 referred to para 7 and16

1965 SCR 218 relied on para 13

AIR 1991 SC 1893 relied on para 14

1962 AIR 36 referred to para 16

1962 SCR 586 referred to para 16

1971 (3) SCR 267 referred to para 16



1995 (4) Suppl. SCR 158relied on para 17



1996 (2) SCC 715 referred to para 19

1999 (2) Suppl. SCR 521 relied on para 20



2004 (5) Suppl. SCR 972 referred to para 29





CIVIL APPELLATE JURISDICTION : Civil Appeal No.2608 of 2011 etc.

From the Judgment & Order dated 04.01.2011 of the HighCourt of Judicature at Allahabad, Lucknow Bench in WritPetition No. 146 (S/B) of 2009.

WITH

C.A. Nos. 4009, 4022, 4027-4029 of 2012, 2605, 2607,2609, 2610, 2614, 2616, 2629, 2675, 2676, 2677, 2678, 2679,2729, 2730, 2737 of 2011, 4030, 4031, 4032, 4033, 4034,


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4023, 4024, 4025 of 2012, 4691, 4697, 4699 of 2011, 4026,4016, 4021, 4017, 4018, 4019, 4020 of 2012, 2622, 2611,2612, 2613, 2623, 2624, 2682-83, 2684, 2881, 2884-85, 2886,2908, 2909, 2944-2945 of 2011, 566 & 4067 of 2012.

P.S. Patwalia, Raju Ramachandran, P.P. Rao, RanjitKumar, Vijay Hansaria, Shanti Bhushan, Dr. Rajeev Dhawan,Vinod A. Bobde, Shail Kumar Dwivedi, AAG Aman Preet SinghRahi, Ashok K. Mahajan, Ankur Talwar, Sanchit Asthana, RajatSingh, Ankur Mittal, P.N. Gupta, Manoj Kumar Dwivedi,Vandana Mishra, Aviral Shukla, Abhinav Shrivastava, AshutoshSharma, Naresh Bakshi, Tushar Bakshi, S. Ranjith Kumar,Natasha Vinayak, Namrata Sharma, Ajay Singh, Ranjith,Jaiveer Shergill, Manoj Kumar Dwivedi, G. Venkateswara Rao,Abhinav Srivatava, P.N. Gupta, Aviral Shukla, Sanjay Singh,Rajeev Singh, Shaikh Chand Saheb, Moinuddin Ansari, R.K.Gupta, Apeksha Sharan, Abhimanyu Tiwari, S.K. Gupta, UtsavSidhu, Shekhar Kumar, T. Srinivas Murthy, Preetika Dwivedi,Mukti Chaudhary, Sanskriti Pathak, Senthil Jagadeesan, SatyaMitra, Rakesh Kumar Gupta, Shiv Ram Pandey, A. Subba Rao,Manoj Gorkela, A.T. Rao, Anand Tiwari, Vinod, Ajit KumarGupta, Mridula Ray Bharadwaj, Pradeep Misra, Suraj Singh,Prashant Choudhary, Anuvrat Sharma, Vishwajit Singh,Abhinda Maheswari, Kumar Parimal, Sanjeev K. Choudhary,A.P. Mayee, Abhishek Chaudhary, Vishwajit Singh, AbhindraMaheshwari (for Vidhi International), Kamakshi S. Mehwal,Naresh Kaushik, Anirudh Joshi, Lalitha Kaushik, MukeshVerma, Yash Pal Dhingra, Rajendra Singhvi, K.K.L. Gautam,Brij Bhushan, Sameer Singh, Sneha Kalita, Vibhor Vardhan (forHarsh Surana), Manish Pratap Singh, Ajit Singh, Rajan Roy,Shailendra Tiwary, Prem Prakash, P.K. Manohar, C.D. Singh,P.V. Yoeswaran, A.K. Singh for the appearing parties.


DIPAK MISRA, J. 1. Leave granted in Special LeavePetitions.

2. The controversy pertaining to reservation in promotionfor the Scheduled Castes and Scheduled Tribes withconsequential seniority as engrafted under Articles 16(4A) and16(4B) and the facet of relaxation grafted by way of a provisoto Article 335 of the Constitution of India being incorporatedby the Constitution (Seventy-seventh Amendment) Act, 1995,the Constitution (Eight-first Amendment) Act, 2000, theConstitution (Eighty-second Amendment) Act, 2000 and theConstitution (Eighty-fifth Amendment) Act, 2001 at variousstages having withstood judicial scrutiny by the dictum in M.Nagaraj v. Union of India1, the issue of implementation of thesame through existing statutory enactment by the StateLegislature and the subsequent rules framed by the authoritiesof the State or concerned corporation of the State of UttarPradesh, has, as the learned counsel appearing for both sidesin their astute and penetrating manner have pyramided theconcept in its essentiality, either appeared too simple thatsimplification may envy or so complex that it could manifest asthe reservoir of imbalances or a sanctuary of uncertainties.Thus, the net result commands for an endeavour for a detailedsurvey of the past and casts an obligation to dwell upon thecontroversy within the requisite parameters that are absolutelyessential for adjudication of the lis emanated in praesenti.

THE FACTUAL EXPOSE’

3. Extraordinary and, in a way, perplexing though it mayseem, yet as the factual scenario pronouncedly reveals, theassail in some of the appeals of this batch of appeals is to thejudgment and order passed by the Division Bench of the HighCourt of Judicature at Allahabad in Writ Petition No. 63217 of2010 (Mukund Kumar Srivastava vs. State of U.P. andAnother) upholding the validity of the provisions contained inRule 8-A of the U.P. Government Servants Seniority Rules,1991 (for brevity ‘the 1991 Rules’) that were inserted by theU.P. Government Servants Seniority (3rd Amendment) Rules,

1. (2006) 8 SCC 212 : AIR 2007 SC 71.


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129 130U.P. POWER CORPORATION LTD. v. RAJESHKUMAR & ORS. [DIPAK MISRA, J.]

2007 by the employees-appellants and in some of the appeals,the challenge by the State Government and the U.P. PowerCorporation Ltd. (for short ‘the Corporation’) is to the judgmentand order passed by the Division Bench of the High Court ofJudicature at Allahabad, Lucknow Bench, Lucknow, in WritPetition No. 1389 (S/B) of 2007 (Prem Kumar Singh andothers v. State of U.P. and others) and other connected writpetitions holding, inter alia, that the decision rendered by theDivision Bench in the case of Mukund Kumar Srivastava(supra) at Allahabad is per incuriam and not a bindingprecedent and further Section 3(7) of the Uttar Pradesh PublicServants (Reservation for Scheduled Castes, Scheduled Tribesand other Backward Classes) Act, 1994 (for short ‘the 1994Act’) and Rule 8A of the 1991 Rules, as brought into force in2007, are invalid, ultra vires and unconstitutional and, as anecessary corollary, the consequential orders relating toseniority passed by the State Government deserved to bequashed and, accordingly, quashed the same and furtherclarified that in case the State Government decides to providereservation in promotion to any class or classes of posts in theservices under the State, it is free to do so after undertakingthe exercise as required under the constitutional provisionskeeping in mind the law laid down by this Court in M. Nagraj(supra). It has been directed that till it is done, no reservationin promotion on any post or classes of posts under the servicesof the State including the Corporation shall be made henceforth. However, the Division Bench observed that the promotionsalready made as per the provisions/Rules where the benefit ofRule 8A has not been given while making the promotion shallnot be disturbed.

4. The cleavage has invited immense criticism by thelearned senior counsel appearing for both sides on principlesof judicial discipline, decorum, propriety and tradition. Initiallythe debate centred around the concept of precedent and theduties of the Benches but gradually it was acceded to,absolutely totally being seemly, to decide the controversy on

merits instead of a remit and, accordingly, the learned counselfor the parties addressed the Court at length. As advised, weshall dwell upon the merits of the controversy but we shall notabdicate our responsibility to delve into the first issue, i.e.,judicial discipline as we are inclined to think that it is the duty,nay, obligation in the present case to do so because despiterepeated concern shown by this Court, the malady subsists,making an abode of almost permanency. Ergo, we proceed tostate the facts on the first issue and our opinion thereon and,thereafter, shall deal with the assail and attack on both thejudgments on merits.

5. One Rajesh Kumar and two others, the privaterespondents in the appeal preferred by the Corporation, filedWrit Petition No. 146 (S/B) of 2009 at the Lucknow Bench ofthe High Court of Judicature at Allahabad seeking declarationto the effect that Rule 8A of the 1991 Rules and the resolutionpassed by the Corporation are ultra vires. That apart, the assailwas to the constitutional validity of Section 3(7) of the 1994 Acton the foundation that the State Government in gross violationof the constitutional provisions enshrined under Articles 16(4A)and 16(4B) and the interpretation placed thereon by theConstitution Bench in M. Nagraj (supra) has framed the Rulesand the Corporation has adopted the same by amending itsRules and introduced the concept of reservation in promotionwith accelerated seniority.

6. It was contended before the Lucknow Bench that neitherthe State Government nor the Corporation had carried out theexercise as per the decision in M. Nagraj (supra) and in theabsence of the same, the provisions of the Act and the Rulescaused discomfort to the constitutional provisions. The standand stance put forth by the writ petitioners was combated bythe Corporation contending, inter alia, that the ScheduledCastes and Scheduled Tribes were inadequately representedin the service and the chart wise percentage of representationto direct recruitment of reserved categories incumbents would


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clearly reflect the inadequacy. We are not referring to thepleadings in detail as that will be adverted to at a later stage.Suffice to say at present, in view of the assertions made by theparties and the records produced the Division Bench framedthe question for determination whether Rule 8-A of the Rulesis ultra vires and unconstitutional. During the course of hearingof the writ petition, the Corporation brought to the notice of theDivision Bench at Lucknow the judgment dated 21.10.2010passed by the Division Bench at Allahabad in Writ Petition No.63127 of 2010 (Mukund Kumar Srivastava v. State of U.P. andanother). It was urged that the same was a binding precedentand, therefore, the Division Bench was bound to follow thesame. But, the Bench hearing the writ petition declared the saiddecision as not binding and per incuriam as it had not correctlyinterpreted, appreciated and applied the ratio laid down in M.Nagraj (supra) and, on that base, declared Section 3(7) of the1994 Act and Rule 8A of the 1991 Rules as unconstitutionaland issued the directions as have been stated hereinbefore.

7. It is the admitted position at the Bar that certain writpetitions were filed at Lucknow Bench and they were beingheard. They were filed on earlier point of time and were beingdealt with on merits by the concerned Division Bench. At thatjuncture, the Division Bench at Allahabad entertained WritPetition No. 63127 of 2010. The Bench was of the view thatwithout calling for a counter affidavit from any of the respondentsthe writ petition could be decided. Be it noted, the petitionertherein was an Executive Engineer in Rural EngineeringService at Sonebhadra Division and had challenged theseniority list of Executive Engineers of Rural EngineeringService published vide Office Memorandum No. 2950/62-3-2010-45-RES/2010 dated 8.9.2010 and further soughtdeclaration of Rule 8A of the 2007 Rules as unconstitutional.A prayer for issue of a writ of mandamus was sought not toproceed with and promote any person on the next higher poston the basis of the impugned seniority list of ExecutiveEngineers of Rural Engineering Service. The Bench, as is

manifest from the order, adverted to the facts and then dwelledupon the validity of the Rules. It scanned Rules 6, 7, 8 and 8Aand referred to the decision of this Court in Indra Sawhney etc.v. Union of India and others2, Section 3 of the 1994 Act, Article335 of the Constitution and quoted in extenso from M. Nagraj(supra) and came to hold as follows: -

“The Constitutional validity of Amending Act 77thAmendment Act 1995 and 85th Amendment Act 2001whereby clause (4A) has been inserted after clause (4)under the Article 16 of the Constitution has already beenupheld by the Constitution Bench of Hon’ble Apex Courtin M. Nagraj case (supra) holding that neither the catchup rule nor the Constitutional seniority is implicit in Clause(1) and Clause (4) of Article 16 rather the concept of catchup rule and consequential seniority are judicially evolvedconcepts to control the extent of reservation. The sourceof these concepts is in service jurisprudence. Theseconcepts cannot be elevated to the status of an axiom, likesecularism, constitutional sovereignty, equality code etc.forming basic structure of the Constitution. It cannot besaid that by insertion of concept of consequential senioritythe structure of Article 16 stands destroyed or abrogated.It cannot be said that equality code contained underArticles 14, 15, 16 is violated by deletion of catch-up rule.

We are bound by the aforesaid decision of Hon’bleApex Court in M. Nagraj case (supra). Therefore, there canbe no scope for doubt to hold that deletion of catch-up ruleand conferring the benefits of consequential seniority uponthe members of SC and ST on account of reservation inpromotion in a particular service or grade or post has anyway obliterated the equality code contained under Articles14, 15 and 16 of the Constitution as concept of catch-uprule of seniority does not directly flow from Article 16(1)and (4) of the Constitution of India. We are of the

2. 1992 Supp. (3) SCC 217 : AIR 1993 SC 477.


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considered opinion that Rule 8A of 1991 Rules has merelyeffectuated the provisions contained under Article 16(4A)of the Constitut ion of India whereby benefit ofconsequential seniority has been given to the members ofscheduled castes and scheduled tribes due to reservation/roster in promotion by obliterating the concept of catch-upRule of seniority. Rule 8A of 1991 Rules specificallystipulates that if any member of scheduled castes orscheduled tribes is promoted on any post or grade inservice earlier to other categories of persons, the memberof SC/ST shall be treated to be senior to such othercategories of persons who are promoted subsequentlyafter promotion of members of SC/ST, despite anythingcontained in Rules 6, 7 and 8 of 1991 Rules. In our viewRule 8A of 1991 Rules has constitutional sanctity of Article16(4A) of the Constitution and cannot be found faultymerely on account of violation of judicially evolved conceptof catch-up rule of seniority which has been specificallyobliterated by Article 16(4A) of the Constitution. Likewisethe said rule can also not be held to be unconstitutional orinvalid on account of obliteration of any other judiciallyevolved principle of seniority or any other contrary rules ofseniority existing under Rules 6, 7 and 8 of 1991 Rules,as Rule 8A of 1991 Rules opens with non-obstante clausewith overriding effect upon Rules 6, 7 and 8 of 1991 Rules,therefore, we do not find any justification to strike down theprovisions contained under Rule 8-A of 1991 Rules on thesaid ground and on any of the grounds mentioned in thewrit petition.”

After so stating, the Division Bench proceeded to observe asfollows: -

“27. In this connection, we make it clear that deletion ofthe said concept of catch-up Rule of seniority and additionof consequential seniority due to reservation in promotionon any post or grade in service are applicable to the

member of scheduled castes and scheduled tribes only,whereas inter-se seniority of other categories employeesshall continue to be determined according to their existingseniority rules as contemplated by the provisions of Rules6, 7 and 8 of 1991 Rules, subject to aforesaid limitations.Thus the concept of catch-up Rule of Seniority standsobliterated only to the extent of giving benefit ofconsequential seniority to the members of scheduledcastes and scheduled tribes on account of their promotionon any post or grade in service due to reservation,therefore, the scope of obliteration of concept of catch-uprule is limited to that extent. In this view of the matter thepetitioner is not entitled to get the relief sought for in thewrit petition questioning the validity of said Rule 8A of 1991Rules. Thus we uphold the validity of said Rules and thequestion formulated by us is answered accordingly.”

It is interesting to note that in paragraph 29 of the said judgmentthe Division Bench expressed thus: -

“29. However, since the petitioner did not challenge theConstitutional Validity of Law regarding reservation inpromotion in favour of scheduled castes and scheduledtribes existing in State of Uttar Pradesh which is applicableto the services and posts in connection of affairs of Stateof Uttar Pradesh inasmuch as other services and postscovered by said Reservation Act 1994, in our opinion, thepetitioner shall not be permitted to raise this question byfiling any other writ petition again. In given facts andcircumstances of the case, we are not inclined to issue anymandamus, commanding the respondents, not to proceedwith impugned seniority list for the purpose of promotionon the next higher post without expressing any opinion onthe merit of said seniority list. We are also not inclined toissue any such restraint order, staying any promotion onthe next higher post, if the respondents are intending tomake such promotion on the basis of impugned senioritylist.”


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8. We have been apprised at the Bar that it was broughtto the notice of the Division Bench at Allahabad that certain writpetitions, where there was comprehensive challenge, werepart-heard and the hearing was in continuance at LucknowBench, but, as is vivid from the first paragraph of the saidjudgment, the Bench heard the learned counsel for the petitionerand the standing counsel for the State and caveator andproceeded to decide the matter without a counter affidavit.

9. Presently, we shall advert to how the Lucknow Benchdealt with this decision.

10. After stating the basic pleas, the Division Bench atLucknow proceeded to state as follows:-

“.......but before we proceed to decide the validity of thechallenge made and the defence put, we find it expedientto respond to the foremost plea of the respondents that theaforesaid Rule 8-A of the U.P. Government ServantsSeniority Rules, 1991, (hereinafter referred to as ‘theRules, 1991), was challenged before a Division Bench(Hon’ble Sheo Kumar Singh and Hon’ble SabhajeetYadav, JJ) at Allahabad in Writ Petition No. 63127 of 2010in re: Mukund Kumar Srivastava versus State of U.P. andanother, which writ petition has been dismissed upholdingthe validity of the aforesaid Rule 8-A, therefore, this Courtis bound by the said judgment passed by a Bench of equalstrength and hence all these petitions need be dismissedonly on this ground.”

Before the said Bench, it was contended that the judgmentrendered by the Division Bench at Allahabad is per incuriamand is not a binding precedent.

11. Various grounds were urged to substantiate theaforesaid stand. The Division Bench, after analysing thereasoning of the Allahabad Bench in great detail and after

referring to certain decisions and the principles pertaining tobinding precedent, opined as follows:-

“The Division Bench at Allahabad, did not enter into thequestion of exercise of power by the State Governmentunder the enabling provisions of the Constitution andupheld the validity of Rule 8-A only for the reason, thatthere did exist such a power to enact the Rule, whereasthe Apex Court, very clearly has pronounced, that if thegiven exercise has not been undertaken by the StateGovernment while making a rule for reservation with orwithout accelerated seniority, such a rule may not stand thetest of judicial review.

In fact, M. Nagraj obliges the High Court that whena challenge is made to the reservation in promotion, it shallscrutinize the same on the given parameters and it alsocasts a corresponding duty upon the State Government tosatisfy the Court about the exercise undertaken in makingsuch a provision for reservation. The Division Bench didnot advert upon this issue, nor the State Governmentfulfilled its duty as enumerated in M. Nagraj.

The effect of the judgment delivered at Allahabad isalso to be seen in the light of the fact that though theDivision Bench at Allahabad did not adjudicate on thedispute with regard to the seniority for which the petitionerMukund Kumar Srivastava has been relegated to theremedy of State Public Services Tribunal, but upheld thevalidity of Rule 8-A, which could not be said to be the mainrelief, claimed by the petitioner.

For the aforesaid reasons and also for the reason,that the present writ petitions do challenge the very rule ofreservation in promotion, which challenge we have upheldfor the reasons hereinafter stated, because of which therule of accelerated seniority itself falls to the ground, we,with deep respect, are unable to subscribe to the view


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taken by the Division Bench at Allahabad and hold that thesaid judgment cannot be considered as binding precedenthaving been rendered per incuriam.”

12. We have reproduced the paragraphs from both thedecisions in extenso to highlight that the Allahabad Bench wasapprised about the number of matters at Lucknow filed earlierin point of time which were being part heard and the hearingwas in continuum. It would have been advisable to wait for theverdict at Lucknow Bench or to bring it to the notice of thelearned Chief Justice about the similar matters being institutedat both the places. The judicial courtesy and decorum warrantedsuch discipline which was expected from the learned Judgesbut for the unfathomable reasons, neither of the courses weretaken recourse to. Similarly, the Division Bench at Lucknowerroneously treated the verdict of Allahabad Bench not to be abinding precedent on the foundation that the principles laiddown by the Constitution Bench in M. Nagraj (supra) are notbeing appositely appreciated and correctly applied by theBench when there was reference to the said decision andnumber of passages were quoted and appreciated albeitincorrectly, the same could not have been a ground to treat thedecision as per incuriam or not a binding precedent. Judicialdiscipline commands in such a situation when there isdisagreement to refer the matter to a larger Bench. Instead ofdoing that, the Division Bench at Lucknow took the burden onthemselves to decide the case.

13. In this context, we may profitably quote a passage fromLala Shri Bhagwan and another v. Ram Chand and another3:-

“18. .. I t is hardly necessary to emphasise thatconsiderations of judicial propriety and decorum requirethat if a learned single Judge hearing a matter is inclinedto take the view that the earlier decisions of the High Court,whether of a Division Bench or of a single Judge, need to

be reconsidered, he should not embark upon that enquirysitting as a single Judge, but should refer the matter to aDivision Bench or, in a proper case, place the relevantpapers before the Chief Justice to enable him to constitutea larger Bench to examine the question. That is the properand traditional way to deal with such matters and it isfounded on healthy principles of judicial decorum andpropriety. It is to be regretted that the learned single Judgedeparted from this traditional way in the present case andchose to examine the question himself.”

14. In Sundarjas Kanyalal Bhathija and others v. TheCollector, Thane, Maharashtra and others4 while dealing withjudicial discipline, the two-Judge Bench has expressed thus:-

“One must remember that pursuit of the law, however,glamorous it is, has its own limitation on the Bench. In amulti-Judge Court, the Judges are bound by precedentsand procedure. They could use their discretion only whenthere is no declared principle to be found, no rule and noauthority. The judicial decorum and legal propriety demandthat where a learned single Judge or a Division Benchdoes not agree with the decision of a Bench of co-ordinatejurisdiction, the matter shall be referred to a larger Bench.It is a subversion of judicial process not to follow thisprocedure.”

The aforesaid pronouncements clearly lay down what isexpected from the Judges when they are confronted with thedecision of a Co-ordinate Bench on the same issue. Anycontrary attitude, however adventurous and glorious may be,would lead to uncertainty and inconsistency. It has precisely sohappened in the case at hand. There are two decisions by twoDivision Benches from the same High Court. We express ourconcern about the deviation from the judicial decorum anddiscipline by both the Benches and expect that in future, they

3. AIR 1965 SC 1767. 4. AIR 1991 SC 1767.


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shall be appositely guided by the conceptual eventuality of suchdiscipline as laid down by this Court from time to time. We havesaid so with the fond hope that judicial enthusiasm should notobliterate the profound responsibility that is expected from theJudges.

15. Having dealt with the judicial dictum and the proprietypart, we shall now proceed to deal with the case on merit as acommon consensus was arrived at the Bar for the said purpose.The affected employees have filed certain civil appeals againstthe judgment of the Allahabad High Court and the employeeswho are affected by the verdict of the Lucknow Bench have alsopreferred appeals. That apart, the State of U.P. and theCorporation have also challenged the decision as the rulesframed have been declared ultra vires. The main controversyrelates to the validity of Section 3(7) of the 1994 Act and Rule8A of the 1991 Rules. Thus, we really have to advert to theconstitutional validity of the said provisions.

16. Prior to the advertence in aforesaid regard, it isnecessary to have a certain survey pertaining to reservation inpromotional matters. The question of reservation and theassociated promotion with it has been a matter of debate invarious decisions of this Court. After independence, there werevarious areas in respect of which decisions were pronounced.Eventually, in the case of Indra Sawhney and another v. Unionof India and others (supra) the nine-Judge Bench, while dealingwith the question whether clause (4) of Article 16 of theConstitution provides for reservation only in the matter of initialappointment, direct recruitment or does it contemplate andprovide for reservations being made in the matter of promotionas well, recorded the submissions of the petitioners inparagraph 819 which reads as follows: -

“The petitioners’ submission is that the reservationof appointments or posts contemplated by clause (4) isonly at the stage of entry into State service, i.e., direct

recruitment. It is submitted that providing for reservationthereafter in the matter of promotion amounts to a doublereservation and if such a provision is made at eachsuccessive stage of promotion it would be a case ofreservation being provided that many times. It is alsosubmitted that by providing reservation in the matter ofpromotion, the member of a reserved category is enabledto leap-frog over his compatriots, which is bound togenerate acute heartburning and may well lead toinefficiency in administration. The members of the opencompetition category would come to think that whatever betheir record and performance, the members of reservedcategories would steal a march over them, irrespective oftheir performance and competence. Examples are givehow two persons (A) and (B), one belonging to O.C.category and the other belonging to reserved category,having been appointed at the same time, the member ofthe reserved category gets promoted earlier and how evenin the promoted category he jumps over the members ofthe O.C. category already there and gains a furtherpromotion and so on. This would generate, it is submitted,a feeling of disheartening which kills the spirit ofcompetition and develops a sense of disinterestednessamong the members of O.C. category. It is pointed out thatonce persons coming from different sources join acategory or class, they must be treated alike thereafter inall matters including promotions and that no distinction ispermissible on the basis of their “birth-mark”. It is alsopointed out that even the Constituent Assembly debateson draft Article 10(3) do not indicate in any manner that itwas supported to extend to promotions as well. It is furthersubmitted that if Article 16(4) is construed as warrantingreservation even in the matter of promotion it would becontrary to the mandate of Article 335 viz., maintenanceof efficiency in administration. It is submitted that such aprovision would amount to putting a premium uponinefficiency. The members of the reserved category would


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not work hard since they do not have to compete with alltheir colleagues but only within the reserved category andfurther because they are assured of promotion whetherthey work hard and efficiently or not. Such a course wouldalso militate against the goal of excellence referred to inclause (j) of Article 51-A (Fundamental Duties).”

Thereafter, the Bench referred to the decisions in GeneralManager, S. Rly. v. Rangachari5, State of Punjab v. Hira Lal6,Akhil Bharatiya Soshit Karamchari Sangh v. Union of India7

and Comptroller and Auditor General v. K.S. Jagannathan8

and did not agree with the view stated in Rangachari (supra),despite noting the fact that Rangachari has been a law for morethan thirty years and that attempt to reopen the issue wasrepelled in Akhil Bharatiya Soshit Karamchari Sangh (supra).Thereafter, their Lordships addressed to the concept ofpromotion and, eventuall,y after adverting to certain legalprinciples, stated thus: -

“831. We must also make it clear that it would not beimpermissible for the State to extend concessions andrelaxations to members of reserved categories in thematter of promotion without compromising the efficiencyof the administration. The relaxation concerned in State ofKerala v. N.M. Thomas [(1976) 2 SCC 310] and theconcessions namely carrying forward of vacancies andprovisions for in-service coaching/training in KaramchariSangh are instances of such concessions and relaxations.However, it would not be permissible to prescribe lowerqualifying marks or a lesser level of evaluation for themembers of reserved categories since that wouldcompromise the efficiency of administration. We reiteratethat while it may be permissible to prescribe a reasonably

lesser qualifying marks or evaluation for the OBCs, SCsand STs – consistent with the efficiency of administrationand the nature of duties attaching to the office concerned– in the matter of direct recruitment, such a course wouldnot be permissible in the matter of promotions for thereasons recorded hereinabove.”

In paragraph 859, while summarising the said aspect, it hasbeen ruled thus: -

“859. We may summarise our answers to the variousquestions dealt with and answered hereinabove:

.......... .............. ...........

(7) Article 16(4) does not permit provision forreservations in the matter of promotion. This ruleshall, however, have only prospective operation andshall not affect the promotions already made,whether made on regular basis or on any otherbasis. We direct that our decision on this questionshall operate only prospectively and shall not affectpromotions already made, whether on temporary,officiating or regular/permanent basis. It is furtherdirected that wherever reservations are alreadyprovided in the matter of promotion – be it CentralServices or State Services, or for that matterservices under any Corporation, authority or bodyfalling under the definition of ‘State’ in Article 12 –such reservations may continue in operation for aperiod of five years from this day. Within thisperiod, it would be open to the appropriateauthorities to revise, modify or re-issue the relevantrules to ensure the achievement of the objective ofArticle 16(4). If any authority thinks that for ensuringadequate representation of ‘backward class ofcitizens’ in any service, class or category, it isnecessary to provide for direct recruitment therein,

5. AIR 1962 SC 36.

6. (1970) 3 SCC 567.7. (1981) 1 SCC 246.

8. (1986) 2 SCC 679.

SUPREME COURT REPORTS [2012] 4 S.C.R.U.P. POWER CORPORATION LTD. v. RAJESHKUMAR & ORS. [DIPAK MISRA, J.]

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it shall be open to it to do so (Ahmadi, J expressesno opinion on this question upholding thepreliminary objection of Union of India). It would notbe impermissible for the State to extendconcessions and relaxations to members ofreserved categories in the matter of promotionwithout compromising the efficiency of theadministration.”

17. After the said decision, another decision, namely,Union of India and others v. Virpal Singh Chauhan and others9

came to the field. In the said case, the two-Judge Bench wasconcerned with the nature of rule and reservation in promotionsobtaining in the railway service and the rule concerning thedetermination of seniority between general candidates andcandidates belonging to reserved classes in the promotionalcategory. The Bench referred to the decision in R.K. Sabharwalv. State of Punjab10, various paragraphs of the Indian RailwaysEstablishment Manual and paragraphs 692 and 693 of theIndra Sawhney (supra) and opined that the roster would onlyensure the prescribed percentage of reservation but would notaffect the seniority. It has been stated that while the reservedcandidates are entitled to accelerated promotion, they wouldnot be entitled to consequential seniority.

18. Thereafter, in Ajit Singh Januja and others v. Stateof Punjab and others11, the three-Judge Bench posed thequestion in the following terms: -

“The controversy which has been raised in the presentappeals is: whether, after the members of ScheduledCastes/Tribes or Backward Classes for whom specificpercentage of posts have been reserved and roster hasbeen provided having been promoted against those posts

on the basis of “accelerated promotion” because ofreservation of posts and applicability of the roster system,can claim promotion against general category posts in stillhigher grade on the basis of their seniority which itself isthe result of accelerated promotion on the basis ofreservation and roster?”

The Bench referred to the decisions in Virpal SinghChauhan (supra), R.K. Sabharwal (supra) and Indra Sawhney(supra) and ultimately concurred with the view expressed inVirpal Singh Chauhan by stating as follows: -

“16. We respectfully concur with the view in Unionof India v. Virpal Singh Chauhan, that seniority betweenthe reserved category candidates and general candidatesin the promoted category shall continue to be governed bytheir panel position i.e. with reference to their inter seseniority in the lower grade. The rule of reservation givesaccelerated promotion, but it does not give the accelerated“consequential seniority”. If a Scheduled Caste/ScheduledTribe candidate is promoted earlier because of the rule ofreservation/roster and his senior belonging to the generalcategory is promoted later to that higher grade the generalcategory candidate shall regain his seniority over suchearlier promoted Scheduled Caste/Tribe candidate. Asalready pointed out above that when a Scheduled Caste/Tribe candidate is promoted earlier by applying the ruleof reservation/roster against a post reserved for suchScheduled Caste/Tribe candidate, in this process he doesnot supersede his seniors belonging to the generalcategory. In this process there was no occasion toexamine the merit of such Scheduled Caste/Tribecandidate vis-à-vis his seniors belonging to the generalcategory. As such it will be only rational, just and properto hold that when the general category candidate ispromoted later from the lower grade to the higher grade,he will be considered senior to a candidate belonging to

9. (1995) 6 SCC 684.10. (19950 2 SCC 745.

11. (1996) 2 SCC 715.


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the Scheduled Caste/Tribe who had been givenaccelerated promotion against the post reserved for him.Whenever a question arises for filling up a post reservedfor Scheduled Caste/Tribe candidate in a still higher gradethen such candidate belonging to Scheduled Caste/Tribeshall be promoted first but when the consideration is inrespect of promotion against the general category post ina still higher grade then the general category candidatewho has been promoted later shall be considered seniorand his case shall be considered first for promotionapplying either principle of seniority-cum-merit or merit-cum-seniority. If this rule and procedure is not applied thenresult will be that majority of the posts in the higher gradeshall be held at one stage by persons who have not onlyentered service on the basis of reservation and roster buthave excluded the general category candidates from beingpromoted to the posts reserved for general categorycandidates merely on the ground of their initial acceleratedpromotions. This will not be consistent with the requirementor the spirit of Article 16(4) or Article 335 of theConstitution.”

19. In Jagdish Lal and others v. State of Haryana andothers12, a three-Judge Bench opined that seniority granted tothe Scheduled Caste and Scheduled Tribe candidates over ageneral candidate due to his accelerated promotion does notin all events get wiped out on promotion of general candidate.The Bench explained the decisions in Vir Pal Singh Chauhan(supra) and Ajit Singh Januja (supra).

20. In Ajit Singh and others (II) v. State of Punjab andothers,13 the Constitution Bench was concerned with the issuewhether the decisions in Vir Pal Singh Chauhan (supra) andAjit Singh Januja (supra) which were earlier decided to theeffect that the seniority of general candidates is to be confirmed

or whether the later deviation made in Jagdish Lal (supra)against the general candidates is to be accepted. TheConstitution Bench referred to Articles 16(1), 16(4) and 16(4A)of the Constitution and discussed at length the concept ofpromotion based on equal opportunity and seniority and treatedthem to be facets of Fundamental Right under Article 16(1) ofthe Constitution. The Bench posed a question whether Articles16(4) and 16(4A) guarantee any Fundamental Right toreservation. Regard being had to the nature of languageemployed in both the Articles, they were to be treated in thenature of enabling provisions. The Constitution Bench opinedthat Article 16(1) deals with the Fundamental Right and Articles16(4) and 16(4A) are the enabling provisions. After so stating,they proceeded to analyse the ratio in Indra Sawhney (supra),Akhil Bharatiya Soshit Karamchari Sangh (supra) and certainother authorities in the field and, eventually, opined that it isaxiomatic in service jurisprudence that any promotions madewrongly in excess of any quota are to be treated as ad hoc.This applies to reservation quota as much as it applies to directrecruits and promotee cases. If a court decides that in orderonly to remove hardship such roster-point promotees are notto face reversions, - then it would, in our opinion be, necessaryto hold – consistent with our interpretation of Articles 14 and16(1) – that such promotees cannot plead for grant of anyadditional benefit of seniority flowing from a wrong applicationof the roster. While courts can relieve immediate hardshiparising out of a past illegality, courts cannot grant additionalbenefits like seniority which have no element of immediatehardship. Ultimately while dealing with the promotions alreadygiven before 10.2.1995 the Bench directed as follows: -

“Thus, while promotions in excess of roster made before10-2-1995 are protected, such promotees cannot claimseniority. Seniority in the promotional cadre of such excessroster-point promotees shall have to be reviewed after 10-2-1995 and will count only from the date on which theywould have otherwise got normal promotion in any future

12. AIR 1997 SC 2366.

13. (1999) 7 SCC 209.


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Assembly of Uttar Pradesh brought in a legislation, namely, theUttar Pradesh Public Services (Reservation for ScheduledCastes, Scheduled Tribes and other Backward Classes) Act,1994 (UP Act No. 4 of 1994) to provide for reservation in publicservices and posts in favour of the persons belonging toScheduled Castes, Scheduled Tribes and other BackwardClasses of citizens and for matters connected therewith orincidental thereto. Section 3(7), which is relevant for our presentpurpose, reads as follows: -

“Reservation in favour of Scheduled Castes,Scheduled Tribes and other Backward Classes. –

...... .......... ..........

(7) If, on the date of commencement of this Act, reservationwas in force under Government Orders for appointment toposts to be filled by promotion, such Government Ordersshall continue to be applicable till they are modified orrevoked.”

Sub-section (7) of Section 3 was the subject-matter ofassail before the High Court.

24. As the factual matrix would reveal, the State of UttarPradesh brought into existence the Uttar Pradesh GovernmentServants Seniority (First Amendment) Rules, 2002 on the 18thof October, 2002 in exercise of the power conferred underArticle 309 of the Constitution whereby after Rule 8, new Rule8-A was inserted. The said Rule reads as follows: -

“8-A. Notwithstanding anything contained in Rule s6,7 or8 of these rules, a person belonging to the ScheduledCastes or Scheduled Tribes shall on his promotion byvirtue of rule of reservation/ roster, be entitled toconsequential seniority also.”

25. It is worth noting that on May 13, 2005, by the UttarPradesh Government Servants Seniority (Second Amendment)

vacancy arising in a post previously occupied by areserved candidate. That disposes of the “prospectivity”point in relation to Sabharwal.”

21. At this juncture, it is condign to note that Article 16(4A)and Article 16 (4B) were inserted in the Constitution to conferpromotion with consequential seniority and introduced theconcept of carrying forward vacancies treating the vacanciesmeant for reserved category candidates as a separate classof vacancies. The said Articles as amended from time to timeread as follows: -

“16(4A) Nothing in this Article shall prevent the State frommaking any provision for reservation in matters ofpromotion, with consequential seniority, to any class orclasses of posts in the services under the State in favourof the Scheduled Castes and the Scheduled Tribes which,in the opinion of the State, are not adequately representedin the services under the State.

16(4B) Nothing in this article shall prevent the State fromconsidering any unfilled vacancies of a year which arereserved for being filled up in that year in accordance withany provision for reservation made under clause (4) or (4A)as a separate class of vacancies to be filled up in anysucceeding year or years and such class of vacancies shallnot be considered together with the vacancies of the yearin which they are being filled up for determining the ceilingof fifty per cent reservation on total number of that year.”

22. The validity of the said Articles were challenged underArticle 32 of the Constitution of India before this Court and theConstitution Bench in M. Nagraj (supra) upheld the validity ofthe said Articles with certain qualifiers/riders by taking recourseto the process of interpretation. As the controversy rests mainlyon the said decision, we will advert to it in detail at a later stage.

23. Presently, we shall dwell upon the provisions that wereunder challenge before the High Court. The Legislative


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Rules, 2005, Rule 8-A was omitted. However, it was providedin the said Rules that the promotions made in accordance withthe revised seniority as determined under Rule 8-A prior to thecommencement of the 2005 Rules could not be affected.Thereafter, on September 14, 2007, by the Uttar PradeshGovernment Servants Seniority (Third Amendment) Rules,2007, Rule 8-A was inserted in the same language which wehave already reproduced hereinabove. It has been mentionedin the said Rule that it shall be deemed to have come into forceon June 17, 1995. It is germane to note here that the U.P.Power Corporation Limited adopted the said Rules as thereis no dispute about the fact that after the Rules came intoexistence and have been given effect to at some places andthat is why the challenge to the constitutional validity of the Actand the Rules was made before the High Court. We havealready indicated how both the Benches have dealt with the saidsituation.

26. At this stage, we may usefully state that though numberof appeals have been preferred, yet some relate to the assailof the interim orders and some to the final orders. We may onlystate for the sake of clarity and convenience that if Section 3(7)and Rule 8-A as amended in 2007 are held to be constitutionallyvalid, all the appeals are bound to be dismissed and if they areheld to be ultra vires, then the judgment passed by the LucknowBench shall stand affirmed subject to any clarification/modification in our order.

27. As has been noticed hereinbefore, the AllahabadBench had understood the dictum in M. Nagaraj (supra) in adifferent manner and the Division Bench at Lucknow in adifferent manner. The learned counsel appearing for variousparties have advanced their contentions in support of theprovisions in the enactment and the Rules. We would like tocondense their basic arguments and endeavour to pigeon-holekeeping in view the facts which are requisite to be referred toat the time of analysis of the said decision in the backdrop ofthe verdict in M. Nagaraj (supra).

28. Mr. Andhyarujina and Mr. Raju Ram Chandran, learnedsenior counsel criticising the decision passed by the LucknowBench, have submitted that the High Court has fallen into graveerror by not scrutinising the materials produced before it, as aconsequence of which a sanctuary of errors have crept into it.If the counter affidavit and other documents are studiedlyscanned, it would be luminescent that opinion has been formedas regards inadequate representation in promotional postsand, therefore, it had become an imperative to provide forreservation. The opinion formed by the Government need notbe with mathematical precision to broad spectrum and suchexercise has already been done by the State of U.P., sincereservation in promotional matters was already in vogue byvirtue of administrative circulars and statutory provisions for fewdecades. It is urged that the concept of inadequaterepresentation and backwardness have been accepted by theamending power of the Constitution and, therefore, the HighCourt has totally flawed by laying unwarranted emphasis on thesaid concepts. The High Court could not have sat in appealon the rule of reservation solely on the factual bedrock. Thechart brought on record would reflect department wise how thepersons from backward classes have not been extended thebenefit of promotion and the same forms the foundation formaking the enactment and framing the rule and hence, no faultcould have been found with the same. Once an incumbentbelongs to Scheduled Castes/ Scheduled Tribes category, itis conclusive that he suffers from backwardness and no furtherenquiry is necessary. It has been clearly held in the case ofIndra Sawhney (supra) that the test or requirement of socialand educational backwardness cannot be applied to ScheduledCastes/ Scheduled Tribes who indubitably fall within theexpression ‘Backward Classes of Citizen’. It is beyond anyshadow of doubt that Scheduled Castes/ Scheduled Tribes area separate class by themselves and the creamy layer principleis not applicable to them. It has been so held in Avinash Singh


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151 152

Bagri and Ors. v. Registrar IIT Delhi and Another14. Article 16(4A) uses the phrase ‘in the opinion of’ and the said word carriesa different meaning to convey that it is subjective in naturerather than objective. The Report of the “Social JusticeCommittee” dated 28.06.2001 clearly ascertains the need forimplementation of reservation in promotional matters in publicservice in U. P. and the said Report deserves acceptance. TheState Government was possessed of sufficient materials toimplement the promotional provisions which are enabling innature and the same is justified by the “Social JusticeCommittee Report” which has examined the current status ofimplementation of Scheduled Castes/ Scheduled Tribes andother backward classes in other public services with respectto their quota, their participation and progress in variousservices, the substantial backlog in promotional posts incategory A, B and C posts and the inadequacy ofrepresentation in promotional posts and various departmentsand State owned corporations. The High Court has completelyerred specially when there was sufficient data available with theState Government. Regard being had to the factum that thesaid promotions were being given for few decades, a freshexercise regarding adequacy was not necessary. The conceptof efficiency as stipulated under Article 335 of the Constitutionis in no way affected if the reservation does not exceed 50%.The consequential seniority being vested by the Constitution,it follows as natural corollary and hence, no further exercise wasrequired to be undertaken. The learned counsel for the Statehas drawn the attention of this Court with respect to thepercentage of representation to justify that requisite data wasavailable and no further exercise was needed and, therefore,the decision of the High Court is fundamentally fallacious.

29. Mr. P. S Patwalia, learned senior counsel appearingin some appeals for the corporation, has submitted that therequirement of having quantifiable data is not a new conceptpropounded in the case of M. Nagraj (supra) but is a reiteration

of the earlier view enunciated in Indra Sawhney case (supra)and, therefore, the provision could not have been declared asultra vires. The emphasis on backwardness is absolutelymisconceived, for Scheduled Castes/ Scheduled Tribes areduly notified as such in the Presidential list by virtue of Articles341 and 342 of the Constitution. Their exclusion from the listcan alone be done by the amendment of the Presidential Orderand hence, any kind of collection of data as regards thebackwardness is an exercise in futility. The concept of creamylayer principle cannot be applied to Scheduled Castes/Scheduled Tribes as has been held in the case of Ashok KumarThakur v. Union of India15. Learned senior counsel has placedreliance on the decision in E. V. Chinniah v. State of AndhraPradesh16 to highlight that there may be only one list ofScheduled Castes/Scheduled Tribes and this list constitutesone group for the purpose of reservation and the same cannotbe interfered with, disturbed, re-grouped or re-classified by theState. In essence, the submission is that there may not beexclusion by engrafting the principle of backwardness for thepurpose of reservation in promotion. Commenting on theadequacy of representation, it is urged by Mr. Patwalia that thedata was immediately collected after the 1994 Act andthereafter, no fresh data was necessary to be collected afterthe decision rendered by the Constitution Bench in M. Nagraj(supra). It is further submitted by the learned counsel that evenif quantifiable data is not collected, the State can be asked todo so in view of the order passed by this Court in S. B Joshiv. State of Karnatka and Others in W.P. 259 of 1994 decidedon 13.07.2010. The efficiency of service as encapsuled inArticle 335 of the Constitution has been duly respected byproviding a uniform minimum standard of the matters ofpromotion as far as the Corporation is concerned and,therefore, no fault can be found in that regard.

30. Mr. P. P. Rao, learned senior counsel appearing for

U.P. POWER CORPORATION LTD. v. RAJESHKUMAR & ORS. [DIPAK MISRA, J.]

14. (2009) 8 SCC 220

15. (2008) 6 SCC 1.

16. (2005) 1 SCC 394.


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some of the private respondents assailing the decision of theLucknow Bench, has urged that when there was no challengeto the orders issued prior the amendment for reservation inpromotion, no quantifiable data is necessary. Section 3 (7) ofthe 1994 Act does not make any change except recognisingthe earlier orders which lay down that they shall continue to beapplicable till it is modified or revoked and, therefore, it has onlybeen conferred statutory recognition. The High Court hasmisunderstood the decision in M. Nagraj (supra) while statingthat the collection of quantifiable data was not undertakenthough the said decision clearly lays down that a collection ofquantifiable data showing backwardness for the class would berequired while demonstrating the same in Court to the extentof promotion when it is under challenge. In the case at hand,the issue is not the extent of reservation or excessivereservation but reservation in promotion. That apart, theprinciples laid down in M. Nagraj (supra) do not get attractedif reservation in promotion is sought to be made for the firsttime but not for continuing the reservation on the basis ofassessment made by the Parliament in exercise of itsconstituent powers. The Constitutional Amendment removed thebase of the decision in Indra Sawhney (supra) that reservationin promotion is not permissible and the Government in itswisdom has carried out the assessment earlier and decidedto continue the policy and, therefore, to lay down the principlethat in view of the decision in M Nagraj (supra), a fresh exerciseis necessary would tantamount to putting the concept in therealm of inherent fallacy. The decision in Suraj Bhan Meenaand Another v. State of Rajasthan & Ors.17 is not a bindingprecedent inasmuch as it takes note of the contention (atparagraph 24 at page no. 474-475 of the Report) but does notdeal with it. The 85th Amendment which provides forconsequential seniority wipes out the ‘catch up’ rule ‘from itsinception and the general principle of seniority from the dateof promotion operates without any break and for the same

reason the said amendment had been given retrospectiveeffect’. The intention of the Parliament at the time of exerciseof its constitutional power clearly states that the representationof Scheduled Castes/ Scheduled Tribes in the services in theStates had not reached the required level and it is necessaryto continue the existing position of providing reservation inpromotion in the case of Scheduled Castes/ Scheduled Tribes.The learned senior counsel has laid immense emphasis on theintention of the Parliament and the Legislature to continue thepolicy and, pyramiding the said submission, he has contendedthat no fresh exercise is required. It is propounded by Mr. Raothat Article 16 basically relates to classes and not backwardindividuals and therefore, no stress should be given on thebackwardness. Alternatively, the learned senior counsel hassubmitted that the matter should be referred to a larger Bench,regard being had to the important issue involved in the case.

31. Mr. Rakesh Dwivedi, learned senior counsel whorepresents some of the petitioners aggrieved by the LucknowBench decision, has urged that backwardness is presumed inview of the nine-Judge Bench decision in Indra Sawhney(supra) and the same has to be regarded beyond any cavil. Thedictum in M. Nagraj (supra) cannot be understood to mandatecollection of quantifiable data for judging the backwardness ofthe Scheduled Castes/ Scheduled Tribes while makingreservation in promotion. But, unfortunately, the High Court hasunderstood the Judgment in the aforesaid manner. There is nomaterial produced on record to establish that ScheduledCastes/ Scheduled Tribes candidates having been conferredthe benefit of promotion under reservation have ceased to bebackward. Though the decision in Indra Sawhney (supra) heldthat the promotion in reservation is impermissible, yet itcontinued the reservation in promotion for a period of five yearsand, therefore, the Constitution Amendment came into force inthis backdrop Section 3 (7) of the 1994 Act could not have beentreated to be invalid. But the stand that the refixation of seniority

17. (2011) 1 SCC 467.


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after coming into existence of Rule 8-A of the Rules or the ruleby the corporation is basically fallacious, for persons who werepromoted earlier to the higher post are entitled to seniority fromthe date of promotion. The learned senior counsel hascontended that after coming into force of the amendment of theConstitution by inserting Article 16 (4A), the decisions inRangachary (supra) and Akhil Bhartiya Karmachari Sangh(supra) have been restored and the concept of ‘catch up’ ruleas propounded in Ajit Singh II (supra) has also been nullified.Article 16 (4A) only makes it explicit what is implicit underservice jurisprudence in matters of promotion and the saidbenefit was always enjoyed by the Scheduled Castes/Scheduled Tribes people and M. Nagraj (supra) does notintend to affect the said aspect. The learned counsel hasreferred to paragraph 798 of Indra Sawhney (supra) to highlightthe scope of judicial scrutiny in matters which are within thesubjective satisfaction of the executive and are to be tested asper the law laid down in Barium Chemicals v. Company LawBoard18. In essence, the submission is that in adequacy ofrepresentation is in the domain of subjective satisfaction of theState Government and is to be regarded as a policy decisionof the State. The learned senior counsel has distinguished theprinciple enunciated in Suraj Bhan Meena (supra). In that case,the court was not dealing with an issue where the reservationhad already been made and was in continuance. It is highlightedby Mr Dwivedi that in the present case the issue is not onewhere there is no material on record to justify the subjectivesatisfaction, but, on the contrary, there is adequate material toshow that the State Government was justified in introducing theprovision in the Act and the Rule. As regards the efficiency inadministration has mandate under Article 335 of theConstitution, the submission of Mr. Dwivedi is that theconstitutional amendment has been made keeping in mind thedecision in Indra Sawhney (supra) and the amendment ofArticle 335 facilitates the reservations in promotion. The learned

senior counsel would contend that maintenance of efficiencybasically would convey laying a prescription by maintaining theminimum standard and in the case of the Corporation it hasbeen so done. It has been propounded by him that ifbackwardness becomes the criterion, it would bring out theinternal conflict in the dictum of M. Nagraj (supra) and then inthat case it has to be reconciled keeping in view the commonthread of judgment or the matter should be referred to a largerBench. In any case, M. Nagraj (supra) does not lay down thatthe quantifiable data of backwardness should be collected withrespect to eligible Scheduled Castes/ Scheduled Tribesemployees seeking promotion. Mr. Dwivedi has commendedto the decision in Union of India v. Rakesh Kumar19 to highlightthat the proportion of population is the thumb rule as far as theScheduled Castes/ Scheduled Tribes are concerned and thatshould be the laser beam to adjudge the concept of inadequacyof reservation. Reservation in promotion involves a balancingact between the national need to equalise by affirmative actionand to do social justice on one hand and to ensure that equalityof opportunity as envisaged under Article 14 is not undulyaffected by the benefit of promotion which has been conferredby the Act and Rules on the Scheduled Castes/ ScheduledTribes as a balancing act and same has always been upheldby this Court.

32. Mr. Shanti Bhushan, learned senior counsel, hassubmitted that the Constitution Bench in M. Nagaraj (supra) hasclearly laid down certain conditions, namely, that there must becompelling reasons for making reservation in promotion; thatthe State is not bound to make reservation for ScheduledCastes/ Scheduled Tribes in matters of promotion; that if theState thinks that there are compelling reasons to make suchreservation in promotion, it is obligatory on the part of the Stateto collect quantifiable data showing the backwardness of theclass and inadequacy of representation of that class in publicemployment and also by making such reservation in promotion,

18. (1970) 3 SCC 567. 19. 2010 4 SCC 50.


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the efficiency in administration is not affected; that the exerciseis required to be made before making any reservation forpromotion; that the State has not applied its mind to thequestion as to what could be regarded as an adequaterepresentation for Scheduled Castes/Scheduled Tribes inrespect of promotion; that the provision for reservation inmatters of promotion has to be considered in any class orclasses of posts not adequately represented in the servicesunder the State but unfortunately, the exercise in that regard hasnot at all been taken up but amendments have beenincorporated; that the concept of backwardness andinadequacy of representation as understood in the case of M.Nagaraj (supra) has been absolutely misunderstood andmisconstrued by the State Government as a consequence ofwhich the Rules of the present nature have come into existence;that the overall efficiency as enshrined under Article 335 of theConstitution has been given a total go-bye which makesSection 3(7) of the 1994 Act and Rule 8-A absolutely vulnerableand thereby invites the frown of the enabling provision and thedictum in M. Nagaraj (supra); that Rule 8-A which confersaccelerated seniority would leave no room for the efficientgeneral category officers which is not the intention of theframers of the Constitution and also as it is understood byvarious decisions of this Court.

33. Dr. Rajeev Dhavan, learned senior counsel, supportingthe decision of the Division Bench which has declared the Ruleas ultra vires, has submitted that if M. Nagaraj (supra) isproperly read, it does clearly convey that social justice is anover reaching principle of the Constitution like secularism,democracy, reasonableness, social justice, etc. and itemphasises on the equality code and the parameters fixed bythe Constitution Bench as the basic purpose is to bring in astate of balance but the said balance is destroyed by Section3(7) of the 1994 Act and Rule 8-A inasmuch as no exercisehas been undertaken during the post M. Nagaraj (supra)period. In M. Nagraj (supra), there has been emphasis on

interpretation and implementation, width and identity, essenceof a right, the equality code and avoidance of reversediscrimination, the nuanced distinction between the adequacyand proportionality, backward class and backwardness, theconcept of contest specificity as regards equal justice andefficiency, permissive nature of the provisions and conceptualessence of guided power, the implementation in concrete termswhich would not cause violence to the constitutional mandate;and the effect of accelerated seniority and the conditionsprevalent for satisfaction of the conditions precedent to invokethe settled principles. The learned senior counsel furthersubmitted that M. Nagaraj (supra) deals with cadre and theposts but the State has applied it across the board without anykind of real quantifiable data after pronouncement of the M.Nagaraj (supra). It is his further submission that after Section3(7) of the 1994 Act and Rule 8-A are allowed to stand, thebalancing factor which has so far been sustained by this Courtespecially pertaining to reservation would stand crucified. It isurged by him that the chart supplied by the State only refers tothe number and, seniority of officers but it does not throw anylight on the core issue and further, a mere submission of a chartwould not meet the requisite criteria as specified in M. Nagaraj(supra).

34. Mr. Vinod Bobde, learned senior counsel, hassubmitted that if accelerated seniority is confirmed on the rosterby the promotees, the consequences would be disastrousinasmuch as the said employee can reach the fourth level bythe time he attains the age of 45 years and at the age of 49,he would reach the highest level and stay there for nine yearswhereas a general merit promotee would reach the third levelout of the six levels at the age of 56 and by the time he getseligibility to get into the fourth level, he would reach the age ofsuperannuation. It is urged by him that if reservation inpromotion is to be made, there has to be collection ofquantifiable data, regard being had to the backwardness andinadequacy of representation in respect of the posts in a


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particular cadre and while doing so, the other condition asengrafted under Article 335 of the Constitution relating to theefficiency of administration has to be maintained. It is his furthersubmission that in M. Nagaraj (supra), Articles 16(4A) and16(4B) have been treated to be enabling provisions and anenabling provision does not create a fundamental right. If theState thinks to exercise the power, it has to exercise the powerstrictly in accordance with the conditions postulated in the caseof M. Nagaraj (supra). The State of U.P. has totally misguideditself by harbouring the notion that merely because there hasto be representation of Scheduled Castes and ScheduledTribes in the services, the State is obliged to provide forreservation in promotion under Article 16(4A). The learnedsenior counsel would vehemently contend that nothing has beenbrought on record to show that after pronouncement of M.Nagaraj (supra), the State had carried out an exercise but hasbuilt a castle in Spain by stating that the provision being alwaysthere, the data was available. It is canvassed that the stand ofthe State runs counter to the principles laid down in M. Nagaraj(supra) which makes Section 3(7) and Rule 8-A sensitivelysusceptible. The consequential seniority was introduced on18.10.2002 but was obliterated on 13.5.2005 and thereafter,it was revived on 14.9.2007 with retrospective effect and thereason is demonstrable from the order/circular dated17.10.2007 which is based on total erroneous understandingand appreciation of the law laid down by this Court. It is arguedby him that the Act and the Rules were amended solely keepingin view the constitutional provision totally ignoring how the saidArticles were interpreted by this Court. It is propounded by Mr.Bobde that the State has referred to certain data and the“Social Justice Committee Report” of 2001 but the samecannot save the edifice of the impugned statutory provision andthe Rules as the State could not have anticipated what thisCourt was going to say while upholding the constitutionalvalidity.

35. Mr. Ranjit Kumar, learned senior counsel, has laid

immense emphasis on paragraphs 121 to 123 of M. Nagaraj(supra) to buttress the stand that reservation in promotionalmatters is subject to the conditions enumerated in the saidparagraphs. The learned senior counsel has drawn inspirationfrom an order dated 11.3.2010 passed by a two-Judge Benchin Writ Petition (civil) 81 of 2002 wherein the direction wasgiven that the validity may be challenged and on such challenge,the same shall be decided in view of the final decision in M.Nagaraj (supra). The learned senior counsel has placedreliance on Ashok Kumar Thakur v. Union of India andothers20 to highlight that any privilege given to a class shouldnot lead to inefficiency. Emphasis has also been laid on theterm backwardness having nexus with the reservation inpromotion and collection of quantifiable data in a properperspective. He has drawn inspiration from various paragraphsin M. Nagaraj (supra) to show that when an enabling provisionis held valid, its exercise can be arbitrary and in the case athand, the provisions are absolutely arbitrary, unreasonable andirrational.

36. To appreciate the rival submissions raised at the barand the core controversy, it is absolutely seemly to understandwhat has been held in M. Nagraj (supra) by the ConstitutionBench. While assailing the validity of Article 16(4A) of theConstitution which provides for reservation in promotion with aconsequential seniority, it was contended that equity in thecontext of Article 16(1) connotes accelerated promotion so asnot to include consequential seniority and as consequentialseniority has been attached to the accelerated promotion, theconstitutional amendment is violative of Article 14 read withArticle 16(1) of the Constitution. Various examples were citedabout the disastrous affects that would be ushered in, in viewof the amendment. After noting all the contentions, theConstitution Bench addressed to the concept of reservation inthe context of Article 16(4) and further proceeded to deal withequity, justice and merit. In that context, the Bench stated thus:-20. (2008) 6 SCC 1.


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“This problem has to be examined, therefore, on the factsof each case. Therefore, Article 16(4) has to be construedin the light of Article 335 of the Constitution. Inadequacy inrepresentation and backwardness of Scheduled Caste andScheduled Tribes are circumstances which enable theState Government to act under Article 16(4) of theConstitution. However, as held by this Court the limitationson the discretion of the Government in the matter ofreservation under Art icle 16(4) as well asArticle 16(4A) come in the form of Article 335 of theConstitution.”

While dealing with reservation and affirmative action, theConstitution Bench opined thus: -

“48. It is the equality “in fact” which has to be decidedlooking at the ground reality. Balancing comes in wherethe question concerns the extent of reservation. If the extentof reservation goes beyond cut-off point then it results inreverse discrimination. Anti-discrimination legislation hasa tendency of pushing towards de facto reservation.Therefore, a numerical benchmark is the surest immunityagainst charges of discrimination.

49. Reservation is necessary for transcending caste andnot for perpetuating it. Reservation has to be used in alimited sense otherwise it will perpetuate casteism in thecountry. Reservation is under-written by a specialjustification. Equality in Article 16(1) is individual- specificwhereas reservation in Article 16(4) and Article 16 (4-A) isenabling. The discretion of the State is, however, subjectto the existence of “backwardness” and “inadequacy ofrepresentation” in public employment. Backwardness hasto be based on objective factors whereas inadequacy hasto factually exist. This is where judicial review comes in.However, whether reservation in a given case is desirableor not, as a policy, is not for us to decide as long as theparameters mentioned in Articles 16(4) and 16(4-A) are

maintained. As stated above, equity, justice and merit(Article 335)/efficiency are variables which can only beidentified and measured by the State. Therefore, in eachcase, a contextual case has to be made out dependingupon different circumstances which may exist Statewise.”

37. The Bench referred to the cases of Indra Sawhney(supra), R.K. Sabharwal (supra), Vir Pal Singh Chauhan(supra), Ajit Singh (I) (supra) and Ajit Singh (II) (supra) andopined that the concept of catch-up rule and consequentialseniority are judicially evolved concepts to control the extent inreservation and the creation of this concept is relatable toservice jurisprudence. Thereafter, the Constitution Benchreferred to the scope of the impugned amendment and theObjects and Reasons and, in paragraph 86, observed thus: -

“Clause (4-A) follows the pattern specified in Clauses (3)and (4) of Art icle 16. Clause (4-A) of Art icle 16emphasizes the opinion of the States in the matter ofadequacy of representation. It gives freedom to the Statein an appropriate case depending upon the ground realityto provide for reservation in matters of promotion to anyclass or classes of posts in the services. The State has toform its opinion on the quantifiable data regardingadequacy of representation. Clause (4-A) of Article 16 isan enabling provision. It gives freedom to the State toprovide for reservation in matters of promotion. Clause (4-A) of Article 16 applies only to SCs and STs. The saidclause is carved out of Article 16(4). Therefore, Clause (4-A) will be governed by the two compelling reasons -“backwardness” and “inadequacy of representation”, asmentioned in Article 16(4). If the said two reasons do notexist then the enabling provision cannot come into force.The State can make provision for reservation only if theabove two circumstances exist. Further in Ajit Singh (II),this Court has held that apart from “backwardness” and“inadequacy of representation” the State shall also keep


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in mind “overall efficiency” (Article 335). Therefore, all thethree factors have to be kept in mind by the appropriateGovernment in providing for reservation in promotion forSCs and STs.”

Thereafter, the Bench referred to the 2000 AmendmentAct, the Objects and Reasons and the proviso inserted to Article335 of the Constitution and held thus: -

“98. By the Constitution (Eighty-Second Amendment) Act,2000, a proviso was inserted at the end of Article 335 ofthe Constitution which reads as under:

“Provided that nothing in this article shallprevent in making of any provision in favour of themembers of the Scheduled Castes and theScheduled Tribes for relaxation in qualifying marksin any examination or lowering the standards ofevaluation, for reservation in matters of promotionto any class or classes of services or posts inconnection with the affairs of the Union or of aState.”

99. This proviso was added following the benefit ofreservation in promotion conferred upon SCs and STsalone. This proviso was inserted keeping in mind thejudgment of this Court in Vinod Kumar which took the viewthat relaxation in matters of reservation in promotion wasnot permissible under Article 16(4) in view of the commandcontained in Article 335. Once a separate category iscarved out of Clause (4) of Article 16 then that category isbeing given relaxation in matters of reservation inpromotion. The proviso is confined to SCs and STs alone.The said proviso is compatible with the scheme ofArticle 16(4-A).”

In paragraph 102, their Lordships have ruled thus: -

“Clause (4) of Article 16, however, states that theappropriate Government is free to provide for reservationin cases where it is satisfied on the basis of quantifiabledata that backward class is inadequately represented inthe services. Therefore, in every case where the Statedecides to provide for reservation there must exist twocircumstances, namely, “backwardness” and “inadequacyof representation’. As stated above, equity, justice andefficiency are variable factors. These factors are context-specific. There is no fixed yardstick to identify andmeasure these three factors, it will depend on the facts andcircumstances of each case. These are the limitations onthe mode of the exercise of power by the State. None ofthese limitations have been removed by the impugnedamendments. If the concerned State fails to identify andmeasure backwardness, inadequacy and overalladministrative efficiency then in that event the provision forreservation would be invalid. These amendments do notalter the structure of Articles 14, 15 and 16 (equity code).The parameters mentioned in Article 16(4) are retained.Clause (4-A) is derived from Clause (4) of Article 16.Clause (4-A) is confined to SCs and STs alone. Therefore,the present case does not change the identity of theConstitution.”

After so stating, it was observed that there is no violation of thebasic structure of the Constitution and the provisions areenabling provisions. At that juncture, it has been observed asfollows: -

“Article 16(4) is enacted as a remedy for the past historicaldiscriminations against a social class. The object inenacting the enabling provisions like Articles 16(4), 16(4-A) and 16(4-B) is that the State is empowered to identifyand recognize the compelling interests. If the State hasquantifiable data to show backwardness and inadequacythen the State can make reservations in promotions


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keeping in mind maintenance of efficiency which is heldto be a constitutional limitation on the discretion of theState in making reservation as indicated by Article 335.As stated above, the concepts of efficiency,backwardness, inadequacy of representation are requiredto be identified and measured. That exercise depends onavailability of data. That exercise depends on numerousfactors. It is for this reason that enabling provisions arerequired to be made because each competing claimseeks to achieve certain goals. How best one shouldoptimize these conflicting claims can only be done by theadministration in the context of local prevailing conditionsin public employment. This is amply demonstrated by thevarious decisions of this Court discussed hereinabove.Therefore, there is a basic difference between “equality inlaw” and “equality in fact” (See Affirmative Action byWilliam Darity). If Articles 16(4-A) and 16(4-B) flow fromArticle 16(4) and if Article 16(4) is an enabling provisionthen Articles 16(4-A) and 16(4-B) are also enablingprovisions. As long as the boundaries mentioned inArticle 16(4), namely, backwardness, inadequacy andefficiency of administration are retained in Articles 16(4-A) and 16(4-B) as controlling factors, we cannot attributeconstitutional invalidity to these enabling provisions.However, when the State fails to identify and implementthe controlling factors then excessiveness comes in, whichis to be decided on the facts of each case. In a given case,where excessiveness results in reverse discrimination, thisCourt has to examine individual cases and decide thematter in accordance with law. This is the theory of “guidedpower”. We may once again repeat that equality is notviolated by mere conferment of power but it is breachedby arbitrary exercise of the power conferred.”

In paragraph 108, the Bench analyzed the concept ofapplication of the doctrine of guided power under Article 335of the Constitution and, in that context, opined thus: -

“Therefore, the question before us is - whether the Statecould be empowered to relax qualifying marks or standardsfor reservation in matters of promotion. In our view, evenafter insertion of this proviso, the limitation of overallefficiency in Article 335 is not obliterated. Reason is that“efficiency” is a variable factor. It is for State concerned todecide in a given case, whether the overall efficiency ofthe system is affected by such relaxation. If the relaxationis so excessive that it ceases to be qualifying marks thencertainly in a given case, as in the past, the State is freenot to relax such standards. In other cases, the State mayevolve a mechanism under which efficiency, equity andjustice, all three variables, could be accommodated.Moreover, Article 335 is to be read with Article 46 whichprovides that the State shall promote with special care theeducational and economic interests of the weaker sectionsof the people and, in particular, of the scheduled castesand scheduled tribes, and shall protect them from socialinjustice. Therefore, where the State finds compellinginterests of backwardness and inadequacy, it may relaxthe qualifying marks for SCs/STs. These compellinginterests however have to be identified by weighty andcomparable data.”

Thereafter, the Constitution Bench proceeded to deal withthe test to judge the validity of the impugned State Acts andopined as follows: -

“110. As stated above, the boundaries of the width of thepower, namely, the ceiling-limit of 50% (the numericalbenchmark), the principle of creamy layer, the compellingreasons, namely, backwardness, inadequacy ofrepresentation and the overall administrative efficiency arenot obliterated by the impugned amendments. At theappropriate time, we have to consider the law as enactedby various States providing for reservation if challenged.At that time we have to see whether limitations on the


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exercise of power are violated. The State is free toexercise its discretion of providing for reservation subjectto limitation, namely, that there must exist compellingreasons of backwardness, inadequacy of representationin a class of post(s) keeping in mind the overalladministrative efficiency. It is made clear that even if theState has reasons to make reservation, as stated above,if the impugned law violates any of the above substantivelimits on the width of the power the same would be liableto be set aside.”

In paragraph 117, the Bench laid down as follows: -

“The extent of reservation has to be decided on facts ofeach case. The judgment in Indra Sawhney does not dealwith constitutional amendments. In our present judgment,we are upholding the validity of the constitutionalamendments subject to the limitations. Therefore, in eachcase the Court has got to be satisfied that the State hasexercised its opinion in making reservations in promotionsfor SCs and STs and for which the State concerned willhave to place before the Court the requisite quantifiabledata in each case and satisfy the Court that suchreservations became necessary on account of inadequacyof representation of SCs/ STs in a particular class orclasses of posts without affecting general efficiency ofservice as mandated under Article 335 of the Constitution.”

In the conclusion portions, in paragraphs 123 and 124, it hasbeen ruled thus: -

“123. However, in this case, as stated above, the mainissue concerns the “extent of reservation”. In this regardthe State concerned will have to show in each case theexistence of the compelling reasons, namely,backwardness, inadequacy of representation and overalladministrative efficiency before making provision forreservation. As stated above, the impugned provision is

an enabling provision. The State is not bound to makereservation for SCs/STs in matter of promotions. However,if they wish to exercise their discretion and make suchprovision, the State has to collect quantifiable data showingbackwardness of the class and inadequacy ofrepresentation of that class in public employment inaddition to compliance with Article 335. It is made clearthat even if the State has compelling reasons, as statedabove, the State will have to see that its reservationprovision does not lead to excessiveness so as to breachthe ceiling-limit of 50% or obliterate the creamy layer orextend the reservation indefinitely.

124. Subject to the above, we uphold the constitutionalvalidity of the Constitution (Seventy-Seventh Amendment)Act, 1995; the Constitution (Eighty-First Amendment) Act,2000; the Constitution (Eighty-Second Amendment) Act,2000 and the Constitution (Eighty-Fifth Amendment) Act,2001.”

38. From the aforesaid decision and the paragraphs wehave quoted hereinabove, the following principles can be carvedout: -

(i) Vesting of the power by an enabling provision maybe constitutionally valid and yet ‘exercise of power’by the State in a given case may be arbitrary,particularly, if the State fails to identify and measurebackwardness and inadequacy keeping in mind theefficiency of service as required under Article 335.

(ii) Article 16(4) which protects the interests of certainsections of the society has to be balanced againstArticle 16(1) which protects the interests of everycitizen of the entire society. They should beharmonized because they are restatements of theprinciple of equality under Article 14.


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(iii) Each post gets marked for the particular categoryof candidates to be appointed against it and anysubsequent vacancy has to be filled by that categorycandidate.

(iv) The appropriate Government has to apply the cadrestrength as a unit in the operation of the roster inorder to ascertain whether a given class/group isadequately represented in the service. The cadrestrength as a unit also ensures that the upper ceiling-limit of 50% is not violated. Further roster has to bepost-specific and not vacancy based.

(v) The State has to form its opinion on the quantifiabledata regarding adequacy of representation. Clause(4A) of Article 16 is an enabling provision. It givesfreedom to the State to provide for reservation inmatters of promotion. Clause (4A) of Article 16applies only to SCs and STs. The said clause iscarved out of Article 16(4A). Therefore, Clause (4A)will be governed by the two compelling reasons –“backwardness” and “inadequacy ofrepresentation”, as mentioned in Article 16(4). If thesaid two reasons do not exist, then the enablingprovision cannot be enforced.

(vi) If the ceiling-limit on the carry-over of unfilledvacancies is removed, the other alternative time-factor comes in and in that event, the time-scalehas to be imposed in the interest of efficiency inadministration as mandated by Article 335. If thetime-scale is not kept, then posts will continue toremain vacant for years which would be detrimentalto the administration. Therefore, in each case, theappropriate Government will now have to introducethe duration depending upon the fact-situation.

(vii) If the appropriate Government enacts a lawproviding for reservation without keeping in mind theparameters in Article 16(4) and Article 335, thenthis Court will certainly set aside and strike downsuch legislation.

(viii) The constitutional limitation under Article 335 isrelaxed and not obliterated. As stated above, be itreservation or evaluation, excessiveness in eitherwould result in violation of the constitutionalmandate. This exercise, however, will depend onthe facts of each case.

(ix) The concepts of efficiency, backwardness andinadequacy of representation are required to beidentified and measured. That exercise depends onthe availability of data. That exercise depends onnumerous factors. It is for this reason that theenabling provisions are required to be madebecause each competing claim seeks to achievecertain goals. How best one should optimize theseconflict ing claims can only be done by theadministration in the context of local prevailingconditions in public employment.

(x) Article 16(4), therefore, creates a field whichenables a State to provide for reservation providedthere exists backwardness of a class andinadequacy of representation in employment. Theseare compelling reasons. They do not exist in Article16(1). It is only when these reasons are satisfiedthat a State gets the power to provide forreservation in the matter of employment.

39. At this stage, we think it appropriate to refer to the caseof Suraj Bhan Meena and another (supra). In the said case,while interpreting the case in M. Nagaraj (supra), the two-JudgeBench has observed: -


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Classes and subject to the condition of ascertaining as towhether such reservation was at all required.

67. The view of the High Court is based on the decisionin M. Nagaraj case as no exercise was undertaken interms of Article 16(4-A) to acquire quantifiable dataregarding the inadequacy of representation of theSchedule Caste and Scheduled Tribe communities inpublic services. The Rajasthan High Court has rightlyquashed the notif ications dated 28.12.2002 and25.4.2008 issued by the State of Rajasthan providing forconsequential seniority and promotion to the members ofthe Scheduled Caste and Scheduled Tribe communitiesand the same does not call for any interference.”

After so stating, the two-Judge Bench affirmed the view takenby the High Court of Rajasthan.

41. As has been indicated hereinbefore, it has beenvehemently argued by the learned senior counsel for the Stateand the learned senior counsel for the Corporation that oncethe principle of reservation was made applicable to thespectrum of promotion, no fresh exercise is necessary. It is alsourged that the efficiency in service is not jeopardized. Referencehas been made to the Social Justice Committee Report andthe chart. We need not produce the same as the said exercisewas done regard being had to the population and vacanciesand not to the concepts that have been evolved in M. Nagaraj(supra). It is one thing to think that there are statutory rules orexecutive instructions to grant promotion but it cannot beforgotten that they were all subject to the pronouncement by thisCourt in Vir Pal Singh Chauhan (supra) and Ajit Singh (II)(supra). We are of the firm view that a fresh exercise in the lightof the judgment of the Constitution Bench in M. Nagaraj (supra)is a categorical imperative. The stand that the constitutionalamendments have facilitated the reservation in promotion withconsequential seniority and have given the stamp of approval

“10. In M. Nagaraj case, this Court while upholding theconstitutional validity of the Constitution (77thAmendment)Act, 1995 and the Constitution (85th Amendment) Act,2001, clarified the position that it would not be necessaryfor the State Government to frame rules in respect ofreservation in promotion with consequential seniority, butin case the State Government wanted to frame such rulesin this regard, then it would have to satisfy itself byquantifiable data, that there was backwardness,inadequacy of representation in public employment andoverall administrative inefficiency and unless such anexercise was undertaken by the State Government, the rulerelating to reservation in promotion with consequentialseniority could not be introduced.”

40. In the said case, the State Government had notundertaken any exercise as indicated in M. Nagaraj (supra).The two-Judge Bench has noted three conditions in the saidjudgment. It was canvassed before the Bench that exercise tobe undertaken as per the direction in M. Nagaraj (supra) wasmandatory and the State cannot, either directly or indirectly,circumvent or ignore or refuse to undertake the exercise bytaking recourse to the Constitution (Eighty-Fifth Amendment)Act providing for reservation for promotion with consequentialseniority. While dealing with the contentions, the two-JudgeBench opined that the State is required to place before theCourt the requisite quantifiable data in each case and to satisfythe court that the said reservation became necessary onaccount of inadequacy of representation of Scheduled Castesand Scheduled Tribes candidates in a particular class orclasses of posts, without affecting the general efficiency ofservice. Eventually, the Bench opined as follows: -

“66. The position after the decision in M. Nagaraj case isthat reservation of posts in promotion is dependent on theinadequacy of representation of members of theScheduled Castes and Scheduled Tribes and Backward

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173U.P. POWER CORPORATION LTD. v. RAJESHKUMAR & ORS. [DIPAK MISRA, J.]

M.T. ENRICA LEXIE & ANR.v.

DORAMMA & ORS(Civil Appeal No. 4167 of 2012)

MAY 2, 2012

[R.M. LODHA AND H.L. GOKHALE, JJ.]

Search and Seizure:

Power of police officer to seize certain property – TwoIndian fishermen killed as a result of firing from an Italian ship– Letter issued by Kerala Police to Master of the vessel notto continue her voyage without prior permission – Held:Admittedly, the vessel was not object of the crime nor haveany circumstances come up in the course of investigation thatcreate suspicion of commission of any offence by the vessel– It has been further stated that the detention of the vesselwas no longer required in the matter – Most of the safeguardssought for have been taken care of by the vessel and herowner – The assurance given by the Republic of Italy tosecure the presence of the four Marines, if required by anycourt or lawful authority, fully meets the ends of justice andprotects wholly the interest of the State Government – In noway it affects the State Government’s right to proceed with theinvestigation and prosecute the offenders – The StateGovernment and its authorities shall allow the vessel tocommence her voyage subject to the directions given in thejudgment – Code of Criminal Procedure, 1973 – s.102.

On 15.2.2012, an FIR was lodged by the owner of anIndian fishing boat that as a result of indiscriminate firingfrom an Italian ship i.e. appellant no. 1, two of itsfisherman died. During the course of investigation theCircle Inspector of the Kerala Police issued a letter to theMaster of appellant no. 1 vessel not to continue her

to the Act and the Rules cannot withstand close scrutinyinasmuch as the Constitution Bench has clearly opined thatArticles 16(4A) and 16(4B) are enabling provisions and theState can make provisions for the same on certain basis orfoundation. The conditions precedent have not been satisfied.No exercise has been undertaken. What has been argued withvehemence is that it is not necessary as the concept ofreservation in promotion was already in vogue. We are unableto accept the said submission, for when the provisions of theConstitution are treated valid with certain conditions or riders,it becomes incumbent on the part of the State to appreciateand apply the test so that its amendments can be tested andwithstand the scrutiny on parameters laid down therein.

42. In the ultimate analysis, we conclude and hold thatSection 3(7) of the 1994 Act and Rule 8A of the 2007 Rulesare ultra vires as they run counter to the dictum in M. Nagaraj(supra). Any promotion that has been given on the dictum ofIndra Sawhney (supra) and without the aid or assistance ofSection 3(7) and Rule 8A shall remain undisturbed.

43. The appeals arising out of the final judgment of DivisionBench at Allahabad are allowed and the impugned order is setaside. The appeals arising out of the judgment from the DivisionBench at Lucknow is affirmed subject to the modification asstated hereinabove. In view of the aforesaid, all other appealsare disposed of. The parties shall bear their respective costs.

R.P. Appeals disposed of.

[2012] 4 S.C.R. 174

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175 176M.T. ENRICA LEXIE & ANR. v. DORAMMA & ORS

voyage without his prior permission. The vessel and itsowner filed a writ petition before the High Court. Theirstand was that the Master of the ship was in no wayresponsible and could not interfere with the militaryactivities undertaken by the NMP Squad which wasdirectly under the command of the military of Republic ofItaly. The writ petition was allowed by the Single Judgeof the High Court permitting the vessel to commence hervoyage subject to certain conditions. On the appeal filedby the wife of the one of the deceased fisherman, theDivision Bench of the High Court set aside the orders ofthe single Judge and permitted the vessel and its ownerto approach the jurisdictional Magistrate with anapplication u/s 457 CrPC. Aggrieved, the vessel and itsowner filed the appeal.

Meanwhile three admiralty suits were filed by theowner of the fishing boat and the heirs of the deceasedfishermen. Three settlements took place before LokAdalat. The State Government contended that the saidsettlements were against public policy as also the Indianlaws and would be challenged in appropriateproceedings. The Republic of Italy was also permitted tointervene.

Disposing of the appeal, the Court

HELD: 1. The police officer in the course ofinvestigation can seize any property u/s 102 CrPC if suchproperty is alleged to be stolen or is suspected to bestolen or is the object of the crime under investigation orhas direct link with the commission of offence for whichthe police officer is investigating into. A property notsuspected of commission of the offence which is beinginvestigated into by the police officer cannot be seized.Under s. 102 of the Code, the police officer can seize suchproperty which is covered by s.102(1) and no other. [para13] [181-G-H; 182-A]

1.2. It is the admitted case that the vessel was notobject of the crime nor have any circumstances come upin the course of investigation that create suspicion ofcommission of any offence by the vessel. It has beenfurther stated that the detention of the vessel was nolonger required in the matter. In view thereof, the orderof the Division Bench of the High Court in upsetting theorder of the Single Judge is set aside. [para 14] [182-C-D]

1.3. Two things are required to be made clear - (i) Inthe instant appeal, the Court is not directly concernedwith the correctness, legality or validity of the settlementsarrived at between the Republic of Italy and claimants-plaintiffs. Having regard to certain clauses in thesettlements, insofar as the instant appeal is concerned,these settlements deserve to be ignored; and (ii) thelimited question for consideration in this appeal is withregard to the voyage of the vessel and, therefore, it is notnecessary for this Court to dwell on the position takenup by the Republic of Italy with regard to the jurisdictionof Indian authorities and courts. [para 23] [186-E-H; 187-A]

1.4. Most of the safeguards sought for have beentaken care of by the vessel and her owner. However, forsecuring the presence of four named Marines, it isexpressly stated that the Republic of Italy is agreeable togive assurance to this Court that if the presence of these4 Marines is required by any court or in response to anysummons issued by any court or lawful authority, theRepublic of Italy shall ensure their presence before theappropriate court or such authority. This assurance issubject to the right of the persons summoned tochallenge the same before a competent court in India. Theassurance given by the Republic of Italy fully meets theends of justice and protects wholly the interest of theState Government and in no way it affects its right to


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177 178M.T. ENRICA LEXIE & ANR. v. DORAMMA & ORS

proceed with the investigation and prosecute theoffenders. [para 24, 25] [187-B-F]

1.5. The State Government and its authorities shallallow the vessel to commence her voyage subject to thedirections given in the judgment. [para 26] [187-G]


From the Judgment & Order dated 03.04.2012 of the HighCourt of Kerala at Ernakulam in W. A. No. 679 of 2012.

Goolam E. Vahanvati, Attorney General, Indira Jaising,ASG, K.K. Venugopal, V.J. Mathew, Gopal Subramaniam,Harish N. Salve, Suhail Dutt, Raghenth Basant, Vipin Varghese,Ankur Talwar, Arjun Singh Bhati (for Senthil Jagadeesan), HarrisBeeran, Nishanth Patil, Prashant Patil, Supriya Jain, RekhaPandey, D.S. Mahra, M.T. George, K.T. Kavitha, P.V. Dinesh,P.V. Vinod, Jaimon Andrews, P.P. Sandhu, Robin V.S.Parameswaran Nair, Diljeet Titus, Abhixit Singh, Achint SinghGyani, Jagjit Singh Chhabra, Jaswant Perraya, AnkurManchanda for the apprearing parties.


R.M. LODHA, J. 1. Leave granted.

2. We have heard Mr. K.K. Venugopal, learned seniorcounsel for the appellants, Mr. Goolam E. Vahanvati, learnedAttorney General of India for respondent No. 6, and Mr. GopalSubramaniam, learned senior counsel for respondent Nos. 2and 3. Despite service, respondent No. 1 has not chosen toappear.

3. The vessel - M.T. Enrica Lexie - and M/s Dolphin TankerSRL (owner of the vessel) are in appeal aggrieved by the orderpassed by the Division Bench of the Kerala High Court on April3, 2012 whereby the Division Bench set aside the judgment andorder of the Single Judge dated March 29, 2012.

4. The controversy arises in this way. On February 15, 2012

an First Information Report (FIR) was lodged at NeendakaraCoastal Police Station by one Fredy, owner of the Indianregistered fishing boat St. Antony. It was alleged in the FIR thatat 4.30 p.m. (IST) on that day while the fishing boat St. Antonywas sailing through the Arabian Sea, incriminate firing wasopened by an Italian Ship - M.T. Enrica Lexie (first appellant).As a result of firing from the first appellant vessel, two innocentfishermen who were on board the fishing boat St. Antony diedand the other occupants of the boat saved their lives as theywere lying in reclining position on the deck of the boat. On thebasis of FIR, Crime No. 2/2012 under Section 302 of the IndianPenal Code, (IPC) was registered. Neendakara Coastal PoliceStation also informed the matter to the Coast Guards and,accordingly, the first appellant vessel was intercepted andbrought to the Port of Cochin on February 16, 2012. TwoMarines who allegedly committed the offence were arrested onFebruary 19, 2012.

5. It is not necessary to go into details of the investigationinto the above crime. Suffice it to say that on February 26,2012, the concerned Circle Inspector of Police issued a letterto the Master of the first appellant vessel directing that the vesselshall not continue her voyage without his prior sanction.

6. The stand of the first appellant is that she was on wayfrom Singapore to Egypt having 24 crew members on board.The vessel also had on board six Marines personnel, i.e., NavalMilitary Protection Squad (NMP Squad). The NMP Squad wasdeployed on board the first appellant vessel by the Governmentof Republic of Italy due to severe threat of Somalian pirates inthe Arabian Sea. The second appellant - owner of the vessel -is a member of the Italian Ship Owner's Confederation. TheNMP Squad was on board to ensure efficient protection to thevessel because of piracy and armed plundering as per theagreement between the Ministry of Defence - Naval Staff andthe Italian Ship Owner's Confederation. The Master of the shipis in no way responsible for choices relating to operations


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involved in countering piracy attacks, if any; the Master of theship cannot interfere with the military activities undertaken bythe NMP Squad for the defence of the vessel, its crew andcargo in the face of pirate attacks and the NMP Squad onboard the vessel is always under the direct command of themilitary of Republic of Italy.

7. According to the appellants, although all the agencieshad completed their respective investigations, none of themwere giving official clearance for the vessel to sail and thatnecessitated them to file a Writ Petition before the High Courtof Kerala for appropriate directions and permission to the firstappellant vessel for sailing and proceeding with her voyage.

8. In response to the Writ Petition, counter affidavit wasfiled by the Circle Inspector. The Single Judge, after hearingthe parties, allowed the Writ Petition filed by the appellants,issued a writ of mandamus directing the present respondentNos. 1 and 2 to allow the first appellant vessel to commenceher voyage on certain conditions.

9. Being not satisfied with the judgment and order of theSingle Judge dated March 29, 2012, Doramma (wife of oneof the deceased fishermen), inter alia, filed Writ Appeal No.679 of 2012. The Division Bench of the Kerala High Court notedthat investigation in the matter was not yet complete and nocharge-sheet had been filed and now since proceedings hadbeen initiated by the Investigating Officer under Section 102(3)of the Code of Criminal Procedure, 1973 (for short, 'Code'), thematter needed to be considered by the concerned JudicialMagistrate exercising the powers under Section 457 of theCode and the Single Judge was not justified in allowing the WritPetition and issuing the directions. The Division Bench,accordingly, set aside the order of the Single Judge andpermitted the appellants to approach the jurisdictionalMagistrate with an application under Section 457 of the Codeand observed that the concerned Magistrate should disposeof the application in accordance with the procedure after

applying its judicious mind to the facts of the case.

10. During the pendency of the matter before this Court,certain events have intervened. In three Admiralty Suits - onefiled by the present respondent No. 1 - Doramma, the other bythe first informant Fredy, and the third by Abhinaya Xavier andAguna Xavier, settlements have taken place after impleadmentof the Republic of Italy as one of the parties to the proceedings.The settlement with the present respondent No. 1 - Dorammaand the settlement with Abhinaya Xavier and Aguna Xavier tookplace on April 24, 2012, whereas the settlement with Fredy tookplace on April 27, 2012. All three settlements took place beforeLok Adalat. The Government of Kerala is seriously aggrievedby various clauses of these three settlements. Mr. GopalSubramaniam, learned senior counsel for the Government ofKerala, vehemently contended that these settlements wereagainst public policy and the Indian laws. He submitted that theGovernment of Kerala intends to challenge these settlementsin appropriate proceedings before appropriate forum.

11. In the course of the hearing of this Appeal, an oralapplication was made on behalf of the Republic of Italy forintervention. We permitted the intervention of the Republic ofItaly, particularly in view of the statements made in the Appealthat the NMP Squad comprising of six Italian Naval personnelon board were always under the direct command of theRepublic of Italy and the Master of the vessel could not interferewith the military activities undertaken by the Naval personnelon board the vessel. The intervention by the Republic of Italywas also found by us proper because of serious challenge bythe Government of Kerala to the three settlements entered intobetween the Republic of Italy and the claimants-plaintiffs in thethree Admiralty Suits.

12. Before we deal with the matter further, we may referto Section 102 of the Code which reads as follows :

"102. Power of police officer to seize certain property.-


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(1) Any police officer may seize any property which maybe alleged or suspected to have been stolen, or which maybe found under circumstances which create suspicion ofthe Commission of any offence.

(2) Such police officer, if subordinate to the officer incharge of a police station, shall forthwith report the seizureto that officer.

(3) Every police officer acting under sub-section (1) shallforthwith report the seizure to the Magistrate havingjurisdiction and where the property seized is such that itcannot be conveniently transported to the Court or wherethere is difficulty in securing proper accommodation for thecustody of such property, or where the continued retentionof the property in police custody may not be considerednecessary for the purpose of investigation, he may givecustody thereof to any person on his executing a bondundertaking to produce the property before the Court asand when required and to give effect to the further ordersof the Court as to the disposal of the same:

Provided that where the property seized under sub-section (1) is subject to speedy and natural decay and ifthe person entitled to the possession of such property isunknown or absent and the value of such property is lessthan five hundred rupees, it may forthwith be sold byauction under the orders of the Superintendent of Policeand the provisions of sections 457 and 458 shall, as nearlyas may be practicable, apply to the net proceeds of suchsale."

13. The police officer in course of investigation can seizeany property under Section 102 if such property is alleged tobe stolen or is suspected to be stolen or is the object of thecrime under investigation or has direct link with the commissionof offence for which the police officer is investigating into. Aproperty not suspected of commission of the offence which is

being investigated into by the police officer cannot be seized.Under Section 102 of the Code, the police officer can seizesuch property which is covered by Section 102(1) and no other.

14. After the Writ Petition was filed by the presentappellants before the Kerala High Court, during pendencythereof on March 26, 2012 a report under sub-section (3) ofSection 102 of the Code was filed by the Circle Inspectorbefore the Chief Judicial Magistrate, Kollam reporting to thatcourt that the first appellant vessel has been seized. To ourspecific question to Mr. Gopal Subramaniam, learned seniorcounsel for the Government of Kerala, whether the firstappellant vessel was object of the crime or the circumstanceshave come up in the course of investigation that createsuspicion of commission of any offence by the first appellantvessel, Mr. Gopal Subramaniam answered in the negative. Mr.Gopal Subramaniam, learned senior counsel for theGovernment of Kerala, further stated that the detention of thefirst appellant vessel was no longer required in the matter. Inview thereof, the order of the Division Bench in upsetting theorder of the Single Judge has to go and we order accordingly.

15. The question now remains, whether the order passedby the Single Judge on March 29, 2012 can be allowed tostand as it is or deserves to be modified.

16. Mr. Goolam E. Vahanvati, learned Attorney General,at the outset, submitted that Union of India has the sameposition as has been taken up by the Government of Kerala.He referred to the short counter affidavit filed on behalf of theUnion of India by P. Sasi Kumar, Under Secretary toGovernment of India, Ministry of Shipping. In para 6 of the saidcounter affidavit, it is stated that the material evidence in relationto the first appellant vessel itself has been collected during thepreliminary inquiry for the purposes of Sections 358 and 359of the Merchant Shipping Act, 1958. The FIR lodged againstthe accused persons is being investigated by the competent


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authorities of the State of Kerala because law and order is aState subject.

17. Mr. Gopal Subramaniam, learned senior counsel forthe Government of Kerala, had already indicated that detentionof the first appellant vessel was no longer required. He did nothave any serious objection if the first appellant vessel wasallowed to commence her voyage. He, however, sought for thefollowing safeguards, viz., (i) the appellants must submit to thejurisdiction of the Indian court/s and they must also clarify theirposition about settlements in the Admiralty Suits arrived atbetween the Republic of Italy and the claimants-plaintiffs; (ii) forsecuring the presence of the six crew members, namely, VitelliUmberto (Master), Noviello Carlo (Master SN), James MandleySamson (Chief Officer), Sahil Gupta (2nd Officer), Fulbaria(Seaman) and Tirumala Rao (Ordinary Sea Man) and fourMarines, namely, Voglino Renato (Seargeant), AndronicoMassimo (1st Corporal), Fontano Antonio (3rd Corporal) andConte Alessandro (Corporal), an undertaking must be given bythe Master of the first appellant vessel, the Managing Directorof the owner of the first appellant vessel and the ManagingDirector of the shipping agent, namely, James Mackintosh &Co. Pvt. Ltd.; and (iii) it be clarified that the interest of theGovernment of Kerala shall remain unaffected by thesettlements arrived at between the Republic of Italy and theclaimants-plaintiffs and the Government of Kerala should befree to take appropriate legal recourse in challenging thesesettlements.

18. Mr. K.K. Venugopal, learned senior counsel for theappellants, in response to the submissions made by Mr. GopalSubramaniam, learned senior counsel for the Government ofKerala, submitted that the appellants were not associated withthe settlements arrived at between the Republic of Italy and theclaimants-plaintiffs in the Admiralty Suits. He also submittedthat for securing the presence of the six crew members onboard the first appellant vessel, an undertaking shall be

furnished by the Master of the first appellant vessel, theManaging Director of the owner of the first appellant vessel andManaging Director of the shipping agent, namely, JamesMackintosh & Co. Pvt. Ltd. He also submitted that theappellants, in fact, have submitted to the jurisdiction of the Indiancourts and they maintain that position. As regards, four Marineson board, Mr. K.K. Venugopal submitted that the Marines beingunder the direct command of the military of the Republic of Italy,the owner or the Master of the first appellant vessel were notin a position to give any undertaking or make any statement.

19. Since we have permitted Republic of Italy to intervenein the matter, we wanted to know from Mr. Harish Salve,learned senior counsel for the Republic of Italy, whether theRepublic of Italy was in a position to give any assurance to thisCourt to secure the presence of four Marines, namely, VoglinoRenato (Seargeant), Andronico Massimo (1st Corporal),Fontano Antonio (3rd Corporal) and Conte Alessandro(Corporal), as and when required by the Investigating Officeror any Court or lawful authority, Mr. Harish Salve handed overto us a written note indicating the position of the Republic ofItaly which reads as follows :-

"1. The position of the Republic of Italy is that the allegedincident took place outside Indian territorial waters and theUnion of India and the State of Kerala have no jurisdictionto deal with the matter under Indian municipal laws,including criminal laws, as well as under international law;that the incident is between two sovereign states, i.e.,Republic of India and the Republic of Italy and that disputesettlement that are provided by international law andconventions.

2. The Republic of Italy filed a petition under Article 32 andhas also challenged the legal proceedings initiated inKerala by an appropriate proceeding in the Kerala HighCourt. Without prejudice to its rights [and obligations] underinternational law, and its contentions of sovereign immunity


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including those raised in these two petitions, and withoutaccepting that the actions of the Union of India or the Stateof Kerala are authorized by law, the Republic of Italy isagreeable to give an assurance to the Supreme Court ofIndia that if the presence of these marines is required byany Court or in response to any summons issued by anyCourt or lawful authority, the Republic of Italy shall ensuretheir presence before an appropriate court or authority.This would be subject to the right of the persons summonedto challenge such summons/order before a competentcourt in India.

3. On this assurance this Hon'ble Court may, if it considersit appropriate, issue directions in respect of the following:-

(a) The vessel shall be permitted to sail out of India,and the marines shall sail on the vessel [together with allequipments, arms and ammunitions on board] and crossIndian territorial waters.

4. This assurance should not be considered as in anymanner detracting from the stand of the Republic of Italythat its officers are entitled to sovereign immunity and thatproceedings in India under the Indian municipal laws areillegal.

5. If in appropriate legal proceedings [including thepetition filed by the Republic of Italy in this Hon'ble Court]it is declared that the proceedings in India are illegal, thenthese assurances shall come to an end."

20. In response to the above statement made by theRepublic of Italy, Mr. Goolam E. Vahanvati, learned AttorneyGeneral, submitted that the Union of India did not accept thecorrectness of the assurances made in the above statementand, in any case, it must be clarified that the position taken bythe Republic of Italy would in no way prejudice the proceedings

in this Court or in any other Court or forum.

21. Mr. Gopal Subramaniam, learned senior counsel forthe Government of Kerala, vehemently opposed the abovestatement of the Republic of Italy and submitted that the abovestatement was not acceptable to the Government of Kerala. Hefurther asserted the right of the Government of Kerala toinvestigate into the crime and prosecute the offenders for thedeath of two fishermen.

22. Pertinently, Mr. Harish Salve, learned senior counselfor the Republic of Italy, also submitted that the settlementsarrived at between the Republic of Italy and claimants-plaintiffscould be set aside by this Court in exercise of its powers underArticle 142 of the Constitution of India. Mr. Harish Salve furthersubmitted that the payments under the settlements have beenmade by the Republic of Italy to the claimants-plaintiffs not byway of compensation in the proceedings initiated by them butby way of goodwill and gesture.

23. We may make two things clear - (i) In the presentAppeal, we are not directly concerned with the correctness,legality or validity of the settlements arrived at between theRepublic of Italy and claimants-plaintiffs. Having regard tocertain clauses in the settlements, we are of the view thatinsofar as the present Appeal is concerned, these settlementsdeserve to be ignored and we do so, and (ii) The limitedquestion for consideration in this Appeal is with regard to thevoyage of the first appellant vessel and, therefore, it is notnecessary for us to dwell on the position taken up by theRepublic of Italy that the alleged incident took place outsideterritorial waters and the Union of India and the State of Keralahave no jurisdiction to deal with the matter under municipal lawsand the stout refutation to that position by the Union of India andthe State of Kerala and the strong assertion by the Union ofIndia and the State of Kerala that the offence of murder of two


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Indian citizens was committed within the territorial jurisdictionof India.

24. Most of the safeguards sought for by Mr. GopalSubramaniam, learned senior counsel for the Government ofKerala, have been taken care of by the first appellant vesseland her owner. However, for securing the presence of fourMarines, namely, Voglino Renato (Seargeant), AndronicoMassimo (1st Corporal), Fontano Antonio (3rd Corporal) andConte Alessandro (Corporal), some difficulty remains.

25. While taking up its position as set out in the statementhanded over to us on behalf of the Republic of Italy, it isexpressly stated that the Republic of Italy is agreeable to giveassurance to this Court that if the presence of these 4 Marinesis required by any Court or in response to any summons issuedby any Court or lawful authority, the Republic of Italy shall ensuretheir presence before the appropriate Court or such authority.This assurance is subject to the right of the persons summonedto challenge the same before a competent court in India. In ourview, the assurance given by the Republic of Italy to secure thepresence of these four Marines, namely, Voglino Renato(Seargeant), Andronico Massimo (1st Corporal), FontanoAntonio (3rd Corporal) and Conte Alessandro (Corporal), ifrequired by any court or lawful authority, fully meets the ends ofjustice and protects wholly the interest of the Government ofKerala. In no way it affects the Government of Kerala's right toproceed with the investigation and prosecute the offenders.

26. Having regard to the above, we dispose of the presentAppeal by the following order :-

(1) Subject to the compliances by the appellants as notedbelow, the Government of Kerala and its authorities shallallow the first appellant vessel to commence her voyage:-

(a) The Master of the first appellant vessel, theManaging Director of the owner of the first appellant

vessel and the Managing Director of the shippingagent, namely, James Mackintosh & Co. Pvt. Ltdshall furnish their undertakings to the satisfaction ofthe Registrar General of the Kerala High Court thatsix crew members, namely, Vitelli Umberto(Master), Noviello Carlo (Master SN), JamesMandley Samson (Chief Officer), Sahil Gupta (2ndOfficer), Fulbaria (Seaman) and Tirumala Rao(Ordinary Sea Man), on receipt of summons/noticefrom any court or by Investigating Officer or lawfulauthority shall present themselves within five weeksfrom the date of the receipt of such summons/noticeand shall produce the first appellant vessel, ifrequired by any court or the Investigating Officer orany other lawful authority, within seven weeks fromthe receipt of such summons/notice.

(b) The second appellant shall execute a bond inthe sum of Rupees Three Crores before theRegistrar General of the Kerala High Court forproduction of the first appellant vessel and securingthe presence of the above six crew members asand when called upon by any court or theInvestigating Officer or any other lawful authority.

(2) The assurance given by the Republic of Italy that if thepresence of the four Marines, namely, Voglino Renato(Seargeant), Andronico Massimo (1st Corporal), FontanoAntonio (3rd Corporal) and Conte Alessandro (Corporal),is required by any court or lawful authority or InvestigatingOfficer, the Republic of Italy shall ensure their presencebefore such court or lawful authority or Investigating Officeris accepted. Such assurance shall, however, not affect theright of the above four Marines to challenge such summons/notice issued by any court or Investigating Officer or anyother lawful authority before a competent court in India.

27. It is clarified that the investigation into Crime No. 2/

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189M.T. ENRICA LEXIE & ANR. v. DORAMMA & ORS[R.M. LODHA, J.]

2012 registered at Neendakara Coastal Police Station shallnot be an impediment for commencement of the voyage by thefirst appellant vessel subject to port and customs clearancesin accordance with law and upon furnishing the undertakingsand bond as noted above.

28. The four Marines, namely, Voglino Renato(Seargeant), Andronico Massimo (1st Corporal), FontanoAntonio (3rd Corporal) and Conte Alessandro (Corporal), maysail on the vessel together with all equipments, arms andammunitions on board the first appellant vessel other than thosealready seized by the Investigating Officer.

29. No costs.

R.P. Appeal disposed of.

TEJAS CONSTRUCTIONS & INFRASTRUCTURE PVT.LTD.

v.MUNICIPAL COUNCIL, SENDHWA & ANR.

(Civil Appeal No. 4195 of 2012)

MAY 4, 2012

[T.S. THAKUR AND GYAN SUDHA MISRA, JJ.]

Administrative Law:

Judicial review of award of contract by municipality –Scope of – Acceptance of bid of a contractor for constructionof Integrated water supply scheme by Municipal Councilchallenged by the unsuccessful bidder – Held: The findingsrecorded by the High Court with regard to the requirementsas per the notice inviting tenders and the eligibility andexperience of the successful bidder, are in no way irrationalor absurd – Besides, the Municipal Council had theadvantage of aid and advice of an empanelled consultant, atechnical hand, who could well appreciate the significance ofthe tender condition regarding the bidder executing the singleintegrated water supply scheme and fulfilling that condition oftender by reference to the work undertaken by them –Therefore, there is no reason to interfere with the view takenby the High Court of the allotment of work made in favour ofthe successfully bidder – In the light of the settled legalposition and in the absence of any mala fide or arbitrarinessin the process of evaluation of bids and the determination ofthe eligibility of the bidders, the Court does not consider it tobe a fit case for interference – Tenders – Award of constructioncontract.

The respondent-Municipal Council invited tenders forconstruction of an Integrated Water Supply Scheme, interms of the conditions stipulated in the notice inviting

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191 192TEJAS CONSTRUCTIONS & INFRASTRUCTURE PVT. LTD.v. MUNICIPAL COUNCIL, SENDHWA

extended upto 7.4.2011. That being so, 5 yearsimmediately preceding the issue of the tender noticewould have included the year 2010-2011 also for whichfinancial year, audit of the company’s books, accountsand documents had not been completed. Such being thecase, respondent No.2 could not possibly comply withthe requirement of the tender notice or produce certifiedcopy of the audited balance-sheet for the said year. Allthat it could possibly do was to obtain a certificate basedon the relevant books, registers, records accounts etc.of the company, which certificate was indeed producedby the said respondent. The High Court has rightlyobserved that the appellant had not disputed thecorrectness of the turnover certified by the CharteredAccountant for the year 2010-2011 nor was it disputed thatthe same satisfied the requirement of the tender notice.In that view, therefore, there was no question ofrespondent No.2 being ineligible or committing adeliberate default in producing the requisite documentsto establish its eligibility to offer a bid. [para14-15] [204-F-H; 205-A-B; 203-A]

1.3. The High Court has, while examining thequestion of eligibility of respondent No.2 by reference tothe execution of the single integrated water supplyscheme, recorded a finding that the nature of the workexecuted by respondent No.2 for Upleta satisfied therequirement of the tender notice. That finding is in no wayirrational or absurd. The certificate sufficientlydemonstrates that respondent No.2 had designed, andexecuted an integrated water supply scheme for Upletawhich included raw water transmission from intake wellsand transmission of treated clear water from WTPincluding providing, supplying and laying of pipelines,construction of E.S.Rs, Sumps, Pump houses andproviding erecting pumping machinery. [para 18] [207-E-G]

tenders (NIT). Out of the four bidders, including theappellant and respondent no. 2, found eligible,respondent no. 1 accepted the bid offered by respondentno. 2. The appellant filed a writ petition challenging theeligibility of respondent no. 2 on the grounds: (1) thatrespondent no. 2 had not filed the requisite certifiedbalance-sheets for five years immediately preceding theissue of NIT; and (2) that respondent no. 2 did not havethe requisite experience of executing a single integratedwater supply scheme of the required value. The HighCourt dismissed the writ petition.

Dismissing the appeal, the Court

HELD: 1. A challenge to the award of the project workin favour of respondent No.2 involved judicial review ofadministrative action. The scope and approach to beadopted in the process of any such review is well settled.[para 8] [198-D]

Tata Cellular v. Union of India 1994 (2) Suppl. SCR 122 = (1994) 6 SCC 651; Raunaq International Limited v.I.V.R. Construction Ltd. & Ors. (1999) 1 SCC 49; RelianceAirport Developers (P) Ltd. v. Airports Authority of India & Ors.2006 (8) Suppl. SCR 398 = (2006) 10 SCC 1; SterlingComputers Ltd. v. M & N Publication Ltd. 1993 (1) SCR 81 =(1993) 1 SCC 445; Air India Ltd. v. Cochin InternationalAirport Ltd. & Ors. 2000 (1) SCR 505 = (2000) 2 SCC 617;Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P)Ltd. & Ors. 2005 (3) SCR 666 = (2005) 6 SCC 138 andJagdish Mandal v. State of Orissa 2006 (10) Suppl. SCR 606 = (2007) 14 SCC 517 – referred to.

1.2. As regards the plea that respondent No.2 had notsatisfied the requirement of filing audited balance sheetsfor the five years preceding award of the contract, it issignificant to note that the date of submission of tenderwas initially fixed upto 25.3.2011 but the same was


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193 194TEJAS CONSTRUCTIONS & INFRASTRUCTURE PVT. LTD.v. MUNICIPAL COUNCIL, SENDHWA

1.4. It is also noteworthy that in the matter ofevaluation of bids and determination of eligibility of thebidders, Municipal Council had the advantage of the aidand advice of an empanelled consultant, a technicalhand, who could well appreciate the significance of thetender condition regarding the bidder executing thesingle integrated water supply scheme and fulfilling thatcondition of tender by reference to the work undertakenby them. Therefore, there is no reason to interfere withthe view taken by the High Court of the allotment of workmade in favour of respondent No.2. [para 19] [207-H; 208-A-B]

1.5. It is pertinent to note that out of a total of Rs.19.5crores representing the estimated value of the contract,respondent No.2 is certified to have already executedwork worth Rs.11.50 crores and received a sum ofRs.8.79 crores towards the said work. More importantlythe work in question relates to a drinking water supplyscheme for the residents of a scarcity strickenmunicipality. The project is sponsored with the CentralGovernment assistance under its urban infrastructurescheme for small and middle towns. The completiontarget of the scheme is September 2012. Any interferencewith the award of the contract at this stage is bound todelay the execution of the work and put the inhabitantsof the municipal area to further hardship. Interferencewith the on-going work is, therefore, not conducive topublic interest which can be served only if the schemeis completed as expeditiously as possible giving relief tothe thirsting residents of the area concerned. This isparticularly so when the allotment of work in favour ofrespondent No.2 does not involve any extra cost incomparison to the cost that may be incurred if thecontract was allotted to the appellant-company. [para 20][208-C-F]

1.6. In the light of the settled legal position and in theabsence of any mala fide or arbitrariness in the processof evaluation of bids and the determination of theeligibility of the bidders, this Court does not consider itto be a fit case for interference. [para 21] [208-G-H]

Case Law Reference:


(1999) 1 SCC 49 referred to para 10







From the Judgment & Order dated 20.05.2011 of the HighCourt of Madhya Pradesh bench at Indore in W.P. No. 3427 of2011.

Vikas Singh, Samit Malik, Lakshmi Raman Singh for theAppellant.

Jayant Bhushan, K.V. Vishwanathan, Pragati Neekhra,Suryanarayanm Singh, Ajay, Dharmendra Kumar Sinha,Adeeba Mujahid for the Respondents.


T.S. THAKUR, J. 1. Leave granted.

2. This appeal arises out of an order passed by the HighCourt of Madhya Pradesh at Indore whereby Writ PetitionNo.3427 of 2011 filed by the appellant was dismissed and the


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allotment of the project work involving design, construction andcommissioning of a single integrated water supply at Sendhwa(Madhya Pradesh) in favour of M/s P.C. Snehal ConstructionCompany-respondent No.2 upheld.

3. In terms of notice inviting tenders (NIT for short)Municipal Council Sendhwa, in the State of M.P., invitedtenders from eligible contractors for the construction of anIntegrated Water Supply Scheme at an estimated cost of nearlyrupees twenty crores. Clause (1) of the said NIT as amendedby addendum dated 23rd March, 2011, stipulated the followingessential conditions of eligibility for the intending bidders:

“1. Registered Contractors have to produce validRegistration certificate in the category of S-V orequivalent in any State/Central GovernmentDepartment or Government undertaking.

(a) Registered Contractors/Firms of Repute/JointVenture firms have to produce certificate forexecuting single work of integrated water supplyscheme comprising of intake well, raw/clear waterpumping main, pumps, OHTS, Distribution systemcompleted and running successfully at present,having value equal to 60% of the cost of theproposed works in last 5 years. This certificateshould clearly mention amount of contract,completion period as per Tender and actualcompletion period. (In case of WPI adjustment forcost of works the same may be furnished along witha certificate of Chartered Accountant). Thecertificate shall be issued from the officer not belowthe rank of Executive Engineer or equivalent.

(b) Certified copy of audited balance sheet of last 5years showing annual turnover equal to estimatedcost of the work and average net worth equal to40% of the cost of works.”

4. In response to the above NIT several applications werereceived by respondent No.1 for purchase of the tender forms.It is common ground that only six out of the said applicantseventually participated in the pre-bid meeting arranged byrespondent No.1. It is also not in dispute that out of the saidsix bidders only four were eventually found to be eligible. Thesefour included the appellant-Tejas Construction & InfrastructurePvt. Ltd. and respondent No.2-M/s P.C. Snehal ConstructionCompany, Ahmedabad.

5. The tender conditions, inter alia, provided that the biddocuments shall comprise three envelopes to be submitted byeach of the bidders. Envelope A was to contain the earnestmoney deposited, Envelope B was to contain the technical bidincluding qualification documents while Envelope C was tocontain the price bid of the bidders. The process of evaluationof the bids started on 7th April, 2011 with the opening ofenvelopes in the above order. Opening of envelope A wasuneventful as all the bidders had furnished the earnest moneystipulated under the terms of NIT. The appellant’s case,however, is that when envelope B was opened a request wasmade to respondent No.1 to show the technical bid receivedfrom respondent No.2 which request was granted. Theappellant’s further case is that upon perusal of the technical bidof respondent No.2, the appellant had raised an objection asto the eligibility of the said to participate in the bid process onthe ground that it did not have the requisite experience ofexecuting a single integrated water supply scheme of therequisite value. Respondent No.2 is said to have claimedeligibility to offer a bid on the basis of clubbing of different watersupply scheme projects at Vyara and Songadh which wasimpermissible according to the appellant. The appellant alsoraised an objection to the effect that respondent No.2 had notsubmitted certified copies of audited balance-sheets for the lastfive years and that the net-worth certificate produced from aChartered Accountant for the financial year 2010-2011, did notaccording to the appellant, satisfy the said requirement.


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Despite the objection raised by the appellant, respondent No.1considered all the bids and accepted the bid offered byrespondent No.2. The appellant appears to have approachedthe concerned authorities in Gujarat and obtained a certificateto the effect that Vyara and Songadh projects were two differentprojects and not a single integrated water supply scheme andbased thereon dispatched a telegram to respondent No.1asking for rejection of the bid offered by respondent No.2, butto no avail.

6. Aggrieved by the allotment of work in favour ofrespondent No.2, the appellant filed Writ Petition No.3427 of2011 before the Indore Bench of the High Court of MadhyaPradesh. The challenge to the eligibility of respondent No.2 andeventually to the allotment of the project work to the saidrespondent in the Writ Petition was confined to two distinctgrounds, namely (1) that respondent No.2 had not filed therequisite certified balance-sheets for five years immediatelypreceding the issue of tender notice and (2) that respondentNo.2 did not have the requisite experience of executing a singleintegrated water supply scheme of the required value.

7. The Writ Petition was opposed by the respondents whoasserted in their respective affidavits that requirement ofsubmission of requisite balance-sheets was substantiallycomplied with inasmuch as certified copies of the balance-sheets for four years had been filed but since the audit for thefifth year i.e. 2010-2011 had not been completed, the certificateissued by the Chartered Accountant for the said year sufficientlycomplied with the said requirement. It is also asserted thatrespondent No.2 satisfied the requirement of having executedsingle integrated water supply scheme for Upleta whichincluded raw water transmission from intake well andtransmission of treated clear water from WTP includingproviding, supplying and laying of pipelines, construction ofE.S.R.s, Sumps, Pump houses and providing and erectingpumping machinery. The certificate issued by the UpletaMunicipal Council and by the Gujarat Urban Development

Mission (GUDM) was relied upon in support of that claim. TheHigh Court has, by the judgment and order under challengebefore us, examined both the grounds urged in support of thewrit petition and clearly come to the conclusion that respondentNo.2 was eligible to offer a bid in as much as it had substantiallycomplied with the requirement of filing the certified copies ofaudited balance-sheets for the previous period of five yearsimmediately preceding the issue of tender notice and that it hadthe requisite experience of executing a single integrated watersupply project of the requisite value.

8. We have heard learned counsel for the parties atconsiderable length. A challenge to the award of the projectwork in favour of respondent No.2 involved judicial review ofadministrative action. The scope and the approach to beadopted in the process of any such review, has been settledby a long line of decisions of this Court. Reference of all suchdecisions is in our opinion is unnecessary as the principle oflaw settled thereof are fairly well recognised by now. We may,therefore, refer to some of the said decisions only torecapitulate and refresh the tests applicable to such cases andthe approach which a Writ Court has to adopt while examiningthe validity of an action questioned before it.

9. In Tata Cellular v. Union of India (1994) 6 SCC 651,this Court emphasized the need to find the right balancebetween administrative discretion to decide matters on the onehand and the need to remedy any unfairness on the other andobserved:

“(1) The modern trend points to judicial restraint inadministrative action.

(2) The court does not sit as a court of appeal but merelyreviews the manner in which the decision was made.

(3) The court does not have the expertise to correct theadministrative, decision. If a review of the administrative


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decision is permitted it will be substituting its own decision,without the necessary expertise, which itself may befallible.

(4) The terms of the invitation to tender cannot be open tojudicial scrutiny because the invitation to tender is in therealm of contract.

(5) The Government must have freedom of contract. In otherwords, a fair play in the joints is a necessary concomitantfor an administrative body functioning in an administrativeor quasi-administrative sphere. However, the decision canbe tested by the application of the “Wednesbury principle”of reasonableness and the decision should be free fromarbitrariness, not affected by bias or actuated by malafides.

(6) Quashing decisions may impose heavy administrativeburden on the administration and lead to increased andunbudgeted expenditure.”

10. In Raunaq International Limited v. I.V.R. ConstructionLtd. & Ors. (1999) 1 SCC 492, this Court reiterated the principlegoverning the process of judicial review and held that the WritCourt would not be justified in interfering with commercialtransactions in which the State is one of the parties to the sameexcept where there is substantial public interest involved andin cases where the transaction is mala fide. The court observed:

“10. What are these elements of public interest? (1) Publicmoney would be expended for the purposes of the contract.(2) The goods or services which are being commissionedcould be for a public purpose, such as, construction ofroads, public buildings, power plants or other publicutilities. (3) The public would be directly interested in thetimely fulfilment of the contract so that the services becomeavailable to the public expeditiously. (4) The public wouldalso be interested in the quality of the work undertaken or

goods supplied by the tenderer. Poor quality of work orgoods can lead to tremendous public hardship andsubstantial financial outlay either in correcting mistakes orin rectifying defects or even at times in redoing the entirework — thus involving larger outlays of public money anddelaying the availability of services, facilities or goods, e.g.,a delay in commissioning a power project, as in thepresent case, could lead to power shortages, retardationof industrial development, hardship to the general publicand substantial cost escalation.

11. When a writ petition is filed in the High Courtchallenging the award of a contract by a public authorityor the State, the court must be satisfied that there is someelement of public interest involved in entertaining such apetition. If, for example, the dispute is purely between twotenderers, the court must be very careful to see if there isany element of public interest involved in the litigation. Amere difference in the prices offered by the two tenderersmay or may not be decisive in deciding whether any publicinterest is involved in intervening in such a commercialtransaction. It is important to bear in mind that by courtintervention, the proposed project may be considerablydelayed thus escalating the cost far more than any savingwhich the court would ultimately effect in public money bydeciding the dispute in favour of one tenderer or the othertenderer. Therefore, unless the court is satisfied that thereis a substantial amount of public interest, or the transactionis entered into mala fide, the court should not interveneunder Article 226 in disputes between two rival tenderers.”

11. In Reliance Airport Developers (P) Ltd. v. AirportsAuthority of India & Ors. (2006) 10 SCC 1, this Court held thatwhile judicial review cannot be denied in contractual mattersor matters in which the Government exercises its contractualpowers, such review is intended to prevent arbitrariness andmust be exercised in larger public interest.


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process the Court must exercise its discretionary powerunder Article 226 with great caution and should exerciseit only in furtherance of public interest and not merely onthe making out of a legal point. The Court should alwayskeep the larger public interest in mind in order to decidewhether its intervention is called for or not. Only when itcomes to a conclusion that overwhelming public interestrequires interference, the Court should intervene.”

13. To the same effect is the decision of this Court inMaster Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P)Ltd. & Ors. (2005) 6 SCC 138 and Jagdish Mandal v. Stateof Orissa (2007) 14 SCC 517 where this Court laid down thefollowing tests for judicial interference in exercise of power ofjudicial review of administrative action:

“Therefore, a court before interfering in tender orcontractual matters in exercise of power of judicial review,should pose to itself the following questions :

(i) Whether the process adopted or decision made by theauthority is mala fide or intended to favour someone.

OR

Whether the process adopted or decision made is soarbitrary and irrational that the court can say : ‘the decisionis such that no responsible authority acting reasonably andin accordance with relevant law could have reached.’

(ii) Whether public interest is affected.

If the answers are in the negative, there should be nointerference under Article 226.”

14. Let us examine the challenge to the award of thecontract in favour of respondent No.2 in the light of the abovelegal position. In the earlier part of this judgment the challengeto the allotment of the work in question was primarily based on

12. Reference may also be made to Sterling ComputersLtd. v. M & N Publication Ltd. (1993) 1 SCC 445 where thisCourt held that power of judicial review in respect of contractsentered into on behalf of the State primarily involvesexamination of the question whether there was any infirmity inthe decision-making process if such process was reasonable,rational and non-arbitrary, the Court would not interfere with thedecision. In Air India Ltd. v. Cochin International Airport Ltd.& Ors. (2000) 2 SCC 617, this Court held that award of contractwas essential in commercial transactions which involvescommercial consideration and results in commercial decision.While taking such decision the State can choose its ownmethod on terms of invitation to tender and enter intonegotiations. The following passage from the decision isapposite:

“The award of contract, whether it is by a private party orby a public body or the State, is essentially a commercialtransaction. In arriving at a commercial decisionconsiderations which are of paramount are commercialconsiderations. The State can choose its own method toarrive at a decision. It can fix its own terms of invitation totender and that is not open to judicial scrutiny. It can enterinto negotiations before finally deciding to accept one ofthe offers made to it. Price need not always be the solecriterion for awarding a contract. It is free to grant anyrelaxation, for bona fide reasons, if the tender conditionspermit such a relaxation. It may not accept the offer eventhough it happens to be the highest or the lowest. But theState, its corporations, instrumentalities and agencies arebound to adhere to the norms, standards and procedureslaid down by them and cannot depart from them arbitrarily.Though that decision is not amenable to judicial review,the Court can examine the decision making process andinterfere if it is found vitiated by mala f ides,unreasonableness and arbitrariness.

Even when some defect is found in the decision-making


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a two-fold contention. Firstly, it was argued that respondentNo.2, successful bidder, had not satisfied the requirement offiling audited balance sheets for the five years preceding awardof the contract. That the said respondent had filed certifiedcopies of the audited balance sheets for the years 2006-07,2007-08, 2008-09 and 2009-10, was not in dispute. What wasdisputed was that the balance sheet for the year 2010-11 hadnot been filed, instead a certificate from the CharteredAccountant concerned, relating to the period 1.4.2010 to22.3.2011, had been produced which did not, according to thewrit-petitioner before us, satisfy the requirement of the NIT.Rejecting that contention the High Court held that since thebalance sheet for the year 2010-11 had not been audited theproduction of relevant record of the company was a substantialcompliance with the stipulation contained in the NIT. The HighCourt observed:

“As regards audited balance sheet, it has not beendisputed that respondent No.2 submitted audited balancesheets for years 2006-07, 2007-08, 2008-09 and 2009-2010. Respondent No.2 has further submitted certificateissued by its Chartered Accountant in respect of periodfrom 1.4.2010 to 22.3.2011. Certificate is at page 66,which has been issued on the basis of audited books,documents, registers, records, bills and evidencesproduced before it for verification. Certificate is dated23.3.2011. It has been pointed out by Shri Vijay Assudani,learned advocate appearing for respondent No.2 that bythat time, the financial year 2010-11 was not complete andit was not possible to obtain certified copy of the auditedbalance sheet. It could not be disputed on behalf of thepetitioner that the turnover as shown in the certificate ofChartered Accountant and other documents for last fiveyears, was meeting the requirement as per the NIT.Further, it is not the case of the petitioner that theparticulars and the figures mentioned in the certificate areincorrect. Petitioner, by virtue of Sections 159 and 163 of

the Companies Act, could have obtained certified copy ofbalance sheets of respondent No.2 to demonstrateincorrectness, if any. The petitioner, having not chosen toplace any such documents on record, cannot successfullyraise any objection, when there is substantial complianceof the NIT in relation to turnover.

xxx xxx xxx

Audit for the year 2010-11 was not completed by that time.However, certificate was issued on the basis of the auditbooks, documents, register, records, bills and evidencesproduced before the Chartered Accountant for verification.This amounts to substantial compliance of the requirementwith regard to submission of certified copy of balancesheet, more so, the petitioner himself could have obtainedcopies of audited balance sheet of respondent No.2 andcould have demonstrated incorrectness. It is not the caseof the petitioner that the said certificate depicts incorrectturnover or net worth. This being so, the process adoptedby respondent No.1 cannot be said to be arbitrary orirrational.”

15. There is, in our opinion, no legal flaw in the abovefinding or the line of reasoning adopted by the High Court. It istrue that the date of submission of tender was initially fixed upto25th March, 2011 but the same was extended upto 7th April,2011. That being so, 5 years immediately preceding the issueof the tender notice would have included the year 2010-2011also for which financial year, audit of the company’s books,accounts and documents had not been completed. Such beingthe case, respondent No.2 could not possibly comply with therequirement of the tender notice or produce certified copy ofthe audited balance-sheet for the said year. All that it couldpossibly do was to obtain a certificate based on the relevantbooks, registers, records accounts etc., of the company, whichcertificate was indeed produced by the said respondent. TheHigh Court has rightly observed that the appellant had not


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disputed the correctness of the turnover certified by theChartered Accountant for the year 2010-2011 nor was itdisputed that the same satisfied the requirement of the tendernotice. In that view, therefore, there was no question ofrespondent No.2 being ineligible or committing a deliberatedefault in producing the requisite documents to establish itseligibility to offer a bid. The first limb of the challenge to thefinding of the High Court on the above aspect must, therefore,fail and is accordingly rejected.

16. That leaves us with the second ground on which theappellant questioned the eligibility of respondent No.2 to offera bid, namely, the non-execution by respondent No.2 of a singleintegrated water supply scheme for the requisite value. Theappellant’s case, in this connection, is two-fold. Firstly, it iscontended that the works executed by respondent No.2 forVyare and Songadh were distinct and different works which didnot constitute a single integrated water supply scheme hencecould not be pressed into service to show satisfaction of thecondition of eligibility stipulated under the tender notice. Thealternative submission made by learned counsel appearing forthe appellant in connection with this ground is that the workexecuted by respondent No.2 for Upleta also did not satisfy therequirement of the tender notice inasmuch as the said work didnot involve the construction of intake wells, which was anessential item of work for any integrated water supply scheme.In the Counter Affidavits filed by the Municipal Council andrespondent No.2, the contention that the latter was not eligibleon the ground stated by the appellant has been stoutly denied.Respondent-Council has, inter alia, stated:

“To satisfy this condition, respondent no.2 has placed onrecord the certificate issued by Municipal Council Upleta,whereby respondent No.2 was awarded construction ofsimilar work and has completed the work on 15.8.2010 fora sum of Rs.14,96,78,721/-. Not merely this, to show hisexperience, respondent No.2 has filed various certificatesrelating to work at Bardoli, as well as certificate issued by

Gujarat Urban Development Mission, demonstrating thathe has undertaken the work of 87,21,36,172/- of thesimilar/somewhat similar nature.

In this regard it is worth noticing that the only requirementunder this clause was to have executed single work ofintegrated water supply scheme having above referredcomponents in it and it was not at all necessary for a bidderto have constructed all the components himself but hecould have used the existing components, as such it isinconsequential as to whether respondent No.2 has infactconstructed intake well and water treatment plant in Upleta,but it is of utmost importance that Respondent No.2 shouldhave experience of having executed integrated watersupply scheme.”

17. To the same effect is the case set up by respondentNo.2 who has stated as under:

“I say and submit that the only requirement as per the saideligibility condition was to have executed a single work ofintegrated water supply scheme comprising of all thecomponents, such as intake well, raw/clean water,pumping main, pumps, water treatment plants, over headtanks, distribution system etc., but it was not necessary forthe bidder to have himself constructed all the componentsof integrated water supply scheme. As such to show hisexperience in the said matter, respondent No.2 also hasplaced on record certificate issued by Bardoli Nagar SevaSadan, (Annexure P/10 Page 78 of SLP), whereinrespondent No.2 has constructed water treatment plant of13.5 MLD capacity………………”

They have carried out the work of integrated water supplyfor Upleta Municipal Council for a sum of Rs.14.97 crores,similarly respondent No.2 have also carried augmentationwater supply scheme for Bardoli Incorporation Seva Sadanof Rs.4.35 crores, integrated drinking water supply schemefor Vyara project of Rs.6.84 crores, Unjha Water SupplyProject of Rs.13.19 crores, Jaitpur Water Project Rs.


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16.25 crores, Songarh Integrated Drinking Water SupplyScheme Rs.5.21 crores, Vapi Water Works of Rs.4.00crores, Jasadan Water Suppply Scheme of Rs.3.05crores, Rajula Water Supply Scheme of Rs.3.83 crores,Idar Water Supply Scheme of Rs.4.74 crores, ViramgamWater Supply Project Rs.6.92 crores, Amreli City PipelineDistribution Work Rs.6.49 crores, thus the respondent No.2have executed works of similar nature of Rs.87.21 crores,whereas the present work was for only Rs.20.80 crores,additionally respondent No.2 is executing similar work ofabout Rs.40.50 crores at Dholka, Dhandhuka, Ankleshwar,Gondal, Jasdan and Dhorangdhra. Thus respondent No.2is competent to execute the present work, a copy of list ofworks executed by respondent No.2 under Gujarat UrbanDevelopment Mission duly certified by the G.M. (Technical)of said organization are already annexed as Annexure P/8 (Page 69 of SLP). It is worth mentioning here thataverage turnover of respondent No.2 during last 5 yearsignoring figures of 2010-11 is Rs.45.14 crores andaverage net worth of respondent No.2 for last 5 yearsignoring figures of 2010-11 is Rs. 9.018 crores.”

18. The High Court has, while examining the question ofeligibility of respondent No.2 by reference to the execution ofthe single integrated water supply scheme, recorded a findingthat the nature of the work executed by respondent No.2 forUpleta satisfied the requirement of the tender notice. Thatfinding, in our view, is in no way irrational or absurd. We sayso because the certificate relied upon by respondent No.2sufficiently demonstrates that respondent No.2 had designed,and executed an integrated water supply scheme for Upletawhich included raw water transmission from intake wells andtransmission of treated clear water from WTP includingproviding, supplying and laying of pipelines, construction ofE.S.R.s, Sumps, Pump houses and providing erecting pumpingmachinery.

19. It is also noteworthy that in the matter of evaluation of

the bids and determination of the eligibility of the biddersMunicipal Council had the advantage of the aid & advice of anempanelled consultant, a technical hand, who could wellappreciate the significance of the tender condition regardingthe bidder executing the single integrated water supply schemeand fulfilling that condition of tender by reference to the workundertaken by them. We, therefore, see no reason to interferewith the view taken by the High Court of the allotment of workmade in favour of respondent No.2.

20. We may while parting point out that out of a total ofRs.19.5 crores representing the estimated value of the contract,respondent No.2 is certified to have already executed workworth Rs.11.50 crores and received a sum of Rs.8.79 crorestowards the said work. More importantly the work in questionrelates to a drinking water supply scheme for the residents ofa scarcity stricken municipality. The project is sponsored withthe Central Government assistance under its urban infrastructurescheme for small and middle towns. The completion target ofthe scheme is September 2012. Any interference with the awardof the contract at this stage is bound to delay the execution ofthe work and put the inhabitants of the municipal area to furtherhardship. Interference with the on-going work is, therefore, notconducive to public interest which can be served only if thescheme is completed as expeditiously as possible giving reliefto the thirsting residents of Sendhwa. This is particularly sowhen the allotment of work in favour of respondent No.2 doesnot involve any extra cost in comparison to the cost that maybe incurred if the contract was allotted to the appellant-company.

21. In the light of the above settled legal position and inthe absence of any mala fide or arbitrariness in the process ofevaluation of bids and the determination of the eligibility of thebidders, we do not consider the present to be a fit case forinterference of this Court. This appeal accordingly fails and ishereby dismissed with cost assessed at Rs.25,000/-.

R.P. Appeal dismissed.


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210[2012] 4 S.C.R. 209

SUPER CASSETTES INDUSTRIES LTD.v.

MUSIC BROADCAST PVT. LTD.(Civil Appeal Nos. 4196-4197 of 2012)

MAY 4, 2012

[ALTAMAS KABIR, SURINDER SINGH NIJJAR ANDJ. CHELAMESWAR, JJ.]*

Copyright Act, 1957 – s. 31(1)(b) – Powers under – Scopeof – Power of Copyright Board – To pass ad interim order –In a pending complaint u/s. 31 – Held: Section 31contemplates final relief – The statute does not vest theCopyright Board power to grant interim order – To grantinterim compulsory licence during the pendency of thecomplaint would amount to final relief at the interim stage.

The question for consideration in the presentappeals was whether on a complaint made to theCopyright Board u/s. 31 of the Copyright Act, 1957, thesaid Board under Clause (b) of Sub-Section (1) can passan interim order in the pending complaints.

Allowing the appeals, the Court

HELD: 1. The language used in Section 31ofCopyright Act, 1957 clearly contemplates a final orderafter a hearing and after holding an inquiry to seewhether the ground for withholding of the work from thepublic was justified or not. There is no hint of any powerhaving been given to the

Board to make interim arrangements, such as, grantof interim compulsory licences, during the pendency ofa final decision of an application. [Para 38] [232-B-C]

2. The power being sought to be attributed to theCopyright Board involves the grant of the final relief,which is the only relief contemplated u/s. 31 of theCopyright Act. Even in matters under Order XXXIX Rules1 and 2 and Section 151 of CPC an interim relief grantingthe final relief should be given after exercise of greatcaution and in rare and exceptional cases. In the instantcase, such a power is not even vested in the CopyrightBoard and hence the question of granting interim reliefby grant of an interim compulsory licence cannot arise.To grant an interim compulsory licence during the stayof the proceedings would amount to granting the finalrelief at the interim stage, although the power to grantsuch relief has not been vested in the Board. [Para 42][233-D-H]

3. A Tribunal is a creature of statute and can exerciseonly such powers as are vested in it by the statute.Tribunals discharging quasi-judicial functions and havingthe trappings of a Court, are generally considered to bevested with incidental and ancillary powers to dischargetheir functions, but that cannot surely mean that in theabsence of any provision to the contrary, such Tribunalwould have the power to grant at the interim stage, thefinal relief which it could grant. Such incidental powerscould at best be said to exist in order to preserve thestatus-quo, but not to alter the same, as will happen, ifan interim compulsory licence is granted. If the legislaturehad intended that the Copyright Board should havepowers to grant mandatory injunction at the interim stage,it would have vested the Board with such authority.[Paras 39, 43 and 44] [232-D; 234-A-D]

Morgan Stanley Mutual Fund vs. Kartick Das (1994) 4SCC 225: 1994 (1) Suppl. SCR 136; Rajeev Hitendra Pathakand Ors. vs. Achyut Kashinath Karekar and Anr. 2011 (9)SCALE 287; Bindeshwari Prasad Singh vs. Kali Singh (1977)1 SCC 57: 1977 (1) SCR 125 – relied on.209

* Judgment Pronounced by J. Chelameswar, J. made non-reportable.


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211 212SUPER CASSETTES INDUSTRIES LTD. v. MUSICBROADCAST PVT. LTD.

Income Tax Officer vs. M.K. Mohammed Kunhi (1969) 2SCR 65;Allahabad Bank, Calcutta vs. Radha Krishna Maityand Ors. (1999) 6 SCC 755: 1999 (2) Suppl. SCR 290;Industrial Credit and Investment Corporation of India Ltd. vs.Grapco Industries Ltd. and Ors. (1999) 4 SCC 710: 1999 (3)SCR 759 – distinguished.

Music Choice India Pvt. Ltd. vs. PhonographicPerformance Ltd. (2009) 39 PTC 597; Sham Lal vs. StateElection Commission AIR 1997 P&H 164; Lingamma vs.State of Karnataka AIR 1982 Karnataka 18; Transcore vs.Union of India (2008) 1 SCC125: 2006 (9) Suppl. SCR 785;Entertainment Network (India) Limited vs. Super CassetteIndustries Limited (2008) 13SCC 30: 2008 (9) SCR 165 –referred to.

Case Law Reference:

(2009) 39 PTC 597 Referred to. Para 11

AIR 1997 P&H 164 Referred to. Para 15

AIR 1982 Karnataka 18 Referred to. Para 16

2006 (9) Suppl. SCR 785 Referred to. Para 20


1994 (1) Suppl. SCR 136 Relied on. Para 39

2011 (9) SCALE 287 Relied on. Para 39


(1969) 2 SCR 65 Distinguished. Para 41

1999 (2) Suppl. SCR 290 Distinguished. Para 41

1999 (3) SCR 759 Distinguished. Para 41

CIVIL APPELLATE JURISDICTION : Civil Appeal No.4196-4197 of 2012.

From the Judgment & Order dated 01.09.2011 of the HighCourt of Delhi at New Delhi in RFA No. 250 of 2011 and CMNo. 8977 of 2011.

Dhruv Mehta, Harish Salve, Bhaskar P. Gupta, Amit Sibal,Neel Mason, Harsh Kaushik Sankalp Dalal, Ankit Relhan,Abhay Chattopadhyay, Giri Subramanium, Senthil Jagadeesan,K.K. Khetan, Meghna Mishra, Sagar Chandra, Rupesh Gupta,Akhid, Mishra Saurabh, Prathiba M. Singh, Kapil Wadhwa,Archana Sahadeva, Chandrika Gupta, Gaurav Sharma, BalajiSrinivasan, K. Datta Diggaj Pathak, Abhay Kumar, Liz Mathew,Karanjawala & Co. for the appearing parties.


ALTAMAS KABIR, J. 1. Leave granted.

2. The sole question for consideration in these appeals iswhether on a complaint made to the Copyright Board underSection 31 of the Copyright Act, 1957, the said Board underClause (b) of Sub-Section (1) can pass an interim order in thepending complaint. Since, we shall be dealing with the saidsection throughout this judgment, the same is extractedhereinbelow :

"31. Compulsory licence in works withheld from public.-(1)If at any time during the term of copyright in any Indian workwhich has been published or performed in public, acomplaint is made to the Copyright Board that the ownerof copyright in the work-

(a) has refused to republish or allow the re-publication of the work or has refused to allow theperformance in public of the work, and by reasonof such refusal the work is withheld from the public;or

(b) has refused to allow communication to the publicby [broadcast], of such work or in the case of a


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213 214SUPER CASSETTES INDUSTRIES LTD. v. MUSICBROADCAST PVT. LTD. [ALTAMAS KABIR, J.]

[sound recording] the work recorded in such [soundrecording], on terms which the complainantconsiders reasonable,

the Copyright Board, after giving to the owner of thecopyright in the work a reasonable opportunity ofbeing heard and after holding such inquiry as it maydeem necessary, may, if it is satisfied that thegrounds for such refusal are not reasonable, directthe Registrar of Copyrights to grant to thecomplainant a licence to re-publish the work,perform the work in public or communicate the workto the public by [broadcast], as the case may be,subject to payment to the owner of the copyright ofsuch compensation and subject to such other termsand conditions as the Copyright Board maydetermine; and thereupon the Registrar ofCopyrights shall grant the licence to thecomplainant in accordance with the directions ofCopyright Board, on payment of such fee as maybe prescribed.

Explanation.-In this sub-section, the expression "Indianwork" includes-

(i) an artistic work, the author of which is a citizen ofIndia; and

(ii) a cinematograph film or a [sound recording] madeor manufactured in India.

(2) Where two or more persons have made a complaintunder sub-section (1), the licence shall be granted to thecomplainant who in the opinion of the Copyright Boardwould best serve the interests of the general public."

3. However, in order to consider the said question, it isnecessary to set out some of the facts giving rise to the saidquestion.

4. These appeals preferred by Super Cassettes IndustriesLtd., hereinafter referred to as "Super Cassettes", are directedagainst the order dated 1st September, 2011, passed by theDelhi High Court whereby it reversed the order passed by theCopyright Board on 28th March, 2011, in which the Board heldthat it did not have the power to grant an interim compulsorylicence. By its judgment and order dated 1st September, 2011in R.F.A.No.250 of 2011 and C.M.No.8977 of 2011, the HighCourt reversed the finding of the Copyright Board upon holdingthat even while the grant of compulsory licence under Section31 of the Copyright Act was under consideration, an interimcompulsory licence could be granted. The High Court also heldthat where the dispute is over the quantum of licence fee, aninterim compulsory licence had to be granted. The impugnedorder directs the Copyright Board to grant an interimcompulsory licence against Super Cassettes with the furtherdirection to the Board to fix its own terms for such licences,after hearing the parties.

5. Appearing for Super Cassettes, Mr. Amit Sibal, learnedcounsel, submitted that on 16th May, 2008, this Court haddecided the two set of cases, in which it upheld the settingaside of the compulsory licence granted against SuperCassettes by the Copyright Board in relation to EntertainmentNetwork India Ltd., hereinafter referred to as "ENIL", a radiobroadcaster. In the other set of matters, where Super Cassetteswas not a party, this Court upheld the grant of compulsorylicence in relation to the works administered by PhonographicPerformance Ltd., hereinafter referred to as "PPL", andremanded the matter to the Copyright Board to fix the rates atwhich the compulsory licences, in relation to the worksadministered by PPL, were to be granted.

6. Pursuant to the decision of this Court, the CopyrightBoard passed the order on 25th August, 2010, fixing the rates,not just for PPL, but for all music providers, including SuperCassettes, although, it was not a party to the proceedings. Mr.


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Sibal submitted that on 9th September, 2010, Music BroadcastPvt. Ltd., hereinafter referred to as "MBPL", wrote to SuperCassettes informing it that MBPL proposed to broadcast theworks in which copyright was owned by Super Cassettes onthe terms fixed in the aforesaid order of the Copyright Boarddated 25th August, 2010. Mr. Sibal submitted that this was donedespite the fact that MBPL had an existing voluntary licencefrom Super Cassettes, which had subsisted since 25th March,2002, and had been amended and renewed a number of timessince then. It was also submitted that several other broadcasterswith existing voluntary licence from Super Cassettes wrotesimilar letters to it.

7. Super Cassettes filed Writ Petition No.6255 of 2010,questioning the order passed by the Copyright Board dated25th August, 2010. After hearing Super Cassettes and theRespondents, including MBPL, on 15th September, 2010, theDelhi High Court passed an interim order to the effect that theorder dated 25th August, 2010, passed by the Board would notbe relied upon by any of the Respondents or any other partyfor a compulsory licence against Super Cassettes. Despite theaforesaid order of the Delhi High Court dated 15th September,2010, MBPL filed an application for compulsory licence underSection 31(1)(b) of the Copyright Act, relying solely on the ratesfixed by the Copyright Board for PPL by its order dated 25thAugust, 2010. Other eight broadcasters also filed applicationsfor compulsory licence against Super Cassettes, relying solelyon the order of the Copyright Board dated 25th August, 2010.Super Cassettes responded to the said offer made by MBPLon the same terms as were prevalent under the expiredvoluntary licence agreement. The said proposal made by SuperCassettes was rejected by MBPL, while other broadcasterscontinued to broadcast the work of Super Cassettes on existingmutually agreed terms which were different from the terms setout in the order of the Copyright Board dated 25th August, 2010.By its order dated 28th March, 2011, the Copyright Boarddismissed the application for interim relief filed by MBPL

holding that it did not have the power to grant any interimcompulsory licence.

8. Mr. Sibal submitted that even though MBPL did notbroadcast the works of Super Cassettes after 25th December,2010, its radio station, known as "Radio City", improved itslistenership ratings to become the most popular radio stationin Mumbai and was maintaining its position as the fifth mostpopular radio station in Delhi. Mr. Sibal urged that MBPLthereafter preferred an appeal against the order dated 28thMarch, 2011, before the Delhi High Court and vide theimpugned order, the High Court held that the Copyright Boardhad the power to issue interim compulsory licence.

9. Mr. Sibal submitted that the impugned order of the DelhiHigh Court, inter alia, held that the power to grant interim reliefis not dependent upon a specific statutory empowerment to thiseffect. The power is a common law principle and is not foundedon any statute or legislation. Mr. Sibal submitted that the DelhiHigh Court also held that the refusal of the copyright holder togrant a licence would, in effect, compel the broadcaster or anyother party similarly placed, into succumbing to the demandsof the owners and that since, litigation is protracted over years,a party would be unable to play or broadcast music, owned bythe copyright holder, even though it was willing to pay areasonable fee for making such broadcast and may also haveto give up its action under Section 31 of the Copyright Act. Mr.Sibal urged that the High Court went on to hold that refusal togrant interim relief would frustrate the rights of a broadcasterunder Section 31 of the Copyright Act, which would render theprovisions of the statute futile and nugatory.

10. It was further held by the High Court that where thecontroversy concerns only the quantum of licence fee, an interimprotection should be granted and even though Super Cassetteswas not a party to the order of the Copyright Board dated 25thAugust, 2010, it is similarly placed as PPL, which was boundby the order passed by the Board on 25th August, 2010.


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Accordingly, it was appropriate that Super Cassettes shouldalso receive 2% of the net advertisement revenue as licencefee in the interim period for broadcasting of its soundrecordings.

11. Mr. Sibal urged that the Division Bench of the BombayHigh Court chose not to differ with the decision of the SingleJudge in Music Choice India Pvt. Ltd. Vs. PhonographicPerformance Ltd. [(2009) 39 PTC 597], in which the learnedSingle Judge had held that the Copyright Act did not prohibitthe Copyright Board from passing any interim order fordetermination of reasonable fees by way of royalty orcompensation by the plaintiff. The High Court disposed of theappeal by making an interim arrangement, whereby SuperCassettes was to receive an aggregate of 4% of theadvertisement revenue of MBPL for broadcasting its soundrecordings, music and literary work, while remanding the matterto the Copyright Board for interim order, making it clear thatthe Board need not be bound by the interim arrangementdevised by the Court.

12. Mr. Sibal submitted that the High Court had erred inlaw in holding that even in the absence of an expressconferment by statute, the Copyright Board had the power togrant an interim compulsory licence under Section 31 of theCopyright Act. He urged that the Copyright Board is a Tribunalcreated under Section 11 of the Copyright Act, 1957, and beinga creature of statute, its powers were confined to the powersgiven to it by the statute. Mr. Sibal urged that while Section 12of the Act vested the Copyright Board with the authority toregulate its own procedure and Section 74 conferred certainlimited powers of a civil court on the Board, the same wereprocedural in nature and did not vest the Board with asubstantive right to grant interim orders under Section 31 of theAct. Mr. Sibal submitted that the High Court had erred in holdingthat grant of interim relief was not dependent upon a specificstatutory empowerment to this effect. Learned counsel

submitted that being a creature of statute, the Copyright Boardcould only exercise such powers as were expressly vested init by the statute and that the power to grant an interimcompulsory licence not having been vested with the Board, itcould not exercise such substantive power, which it did notpossess.

13. In support of his submissions, Mr. Sibal referred to thedecision of this Court in Rajeev Hitendra Pathak & Ors. Vs.Achyut Kashinath Karekar & Anr. [2011 (9) SCALE 287],wherein three learned Judges of this Court were called uponto consider as to whether the District Forum and the StateCommission as established under the Consumer ProtectionAct, 1986, had the power to recall an ex parte order. Afterexamining various provisions of the Consumer Protection Act,this Court held that such an express power not having beenconferred on the District Forum and the State Commission,they had no jurisdiction to exercise such powers which had notbeen expressly given to them.

14. Mr. Sibal also referred to the decision of this Court inMorgan Stanley Mutual Fund Vs. Kartick Das [(1994) 4 SCC225], wherein this Court was considering the scope of theprovisions of the Consumer Protection Act, 1986. Onconstruction of Section 14 of the said Act, this Court came tothe conclusion that there was no power under the Act to grantany interim relief, even of an ad interim nature. Their Lordshipswho decided the matter, observed as follows :

"……… If the jurisdiction of the Forum to grant relief isconfined to the four clauses mentioned under Section 14,it passes our comprehension as to how an interiminjunction could ever be granted disregarding even thebalance of convenience."

15. Reference was also made to a decision of the Punjaband Haryana High Court in Sham Lal Vs. State ElectionCommission [AIR 1997 P&H 164], in which the High Court was


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considering a similar question as to whether the ElectionTribunal constituted under the Punjab State ElectionCommission Act, 1994, had the power to pass an injunctionso as to restrain an elected representative from assuming officepending adjudication of an election petition filed against him.After considering various provisions of the 1994 Act, the Courtobserved that "if the legislature had so desired, nothingprevented it from conferring statutory power upon the ElectionTribunal to grant interim stay or injunction or restraint orderduring the pendency of the election petition." Accordingly, theCourt went on to hold that the Election Tribunal did not havethe power to pass any order of injunction or stay which wouldimpede the implementation of the result of election.

16. Mr. Sibal cited yet another decision on the same issuerendered by a Full Bench of the Karnataka High Court inLingamma Vs. State of Karnataka [AIR 1982 Karnataka 18],where the question involved was as to whether the AppellateTribunal constituted under the Karnataka Appellate Tribunal Act,1976, was empowered to pass interim orders when there wasno express provision which conferred such substantive poweron the Appellate Tribunal. The Full Bench held that "in theabsence of express conferment, power to grant temporaryinjunction was not implied." The Full Bench further held that thefact that no express provision had been made conferring on theTribunal jurisdiction to make interlocutory orders, clearlyindicates that the legislature did not want the Tribunal to havesuch powers.

17. Mr. Sibal urged that in view of the aforesaid decisionsand having regard to the fact that the Copyright Act did notspecifically vest the Copyright Board with substantive powersto pass interim orders under Section 31 of the Copyright Act,the High Court erred in taking a view which was contrary to thewell-established principle that a statutory body could exerciseonly such powers that were vested in it by a statute and nototherwise. Learned counsel urged that by making an interim

arrangement and granting an interim compulsory licence to theRespondent, the High Court had conferred upon itself ajurisdiction which the Copyright Board and, consequently, theHigh Court did not possess under Section 31 of the CopyrightAct.

18. Mr. Sibal went on to submit further that all tribunalsconstituted under different statutes, were not the same andsome enjoyed powers to pass certain orders which had beenvested in them by statute, which made them different from othertribunals to whom such express powers had not been given.Learned counsel urged that there were certain tribunals whichcompletely supplemented the jurisdiction of the Civil Court and,therefore, exercised all the powers of the Civil Court in respectof the matters entrusted to them by statute. In this regard,reference was made to Section 41(1) of the Armed ForcesTribunal Act, 1985, which specifically provides that the Tribunalshall have all jurisdiction, powers and authority exercisable byall courts in matters relating to service. Reference was alsomade to other Tribunals, such as, the Telecom DisputesSettlement & Appellate Tribunal, the National Green Tribunaland also the Debts Recovery Tribunal, which had beenexpressly vested with powers to pass interim orders under thestatutes under which they had been created. Mr. Sibal submittedthat there were no similar provisions in the Copyright Act, whichgranted such powers to the Copyright Board.

19. Mr. Sibal then submitted that notwithstanding the factthat the Copyright Board was discharging quasi-judicialfunctions, it did not possess inherent powers to pass interimorders, since it continued to be a tribunal governed by thestatute under which it had been created. It did not, therefore,have jurisdiction to pass interim orders which inheres in otherTribunals. Referring to the decision of this Court in BindeshwariPrasad Singh Vs. Kali Singh [(1977) 1 SCC 57], Mr. Sibalurged that in the said decision, this Court was called upon todecide as to whether a Magistrate had the authority to review


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the quantum of fees payable by the licencee, an interimcompulsory licence had to be given. Mr. Sibal submitted thatin the face of the well-established propositions of law, the HighCourt's order could not stand and was liable to be set aside.

23. Dr. Abhishek Manu Singhvi, learned Senior Advocate,appearing for the Respondent, firstly contended that althoughSection 31 of the Copyright Act may not have expressly vestedthe power to pass interim orders on the Copyright Boardpending disposal of an application for grant of a compulsorylicence, the same would have to be read into the Section asbeing incidental to the powers granted by the Statute to theBoard to grant compulsory licences. Dr. Singhvi urged that itcould not have been the intention of the legislature that pendingthe determination of the right of an applicant to a compulsorylicence, the public should be deprived of the entertainment oflistening to music in respect of which the owner has thecopyright, in this case, Super Cassettes.

24. Dr. Singhvi urged that if it were to be held that theBoard did not have such power to grant an interim compulsorylicence, the consequences would be contrary to public interest,since it was not possible to assess the time that could be takenby the Copyright Board for disposing of an application for grantof compulsory licence. Dr. Singhvi submitted that the CopyrightAct is a Code in itself and that matters relating to copyrightsand grant of licences had been left to the Copyright Board fordecision, which only lend strength to the submission that theBoard is vested with incidental and ancillary powers underSection 31 of the Act to give effect to the final relief which it isempowered to give under the said Section.

25. Dr. Singhvi referred to Section 25 of the Trade MarksAct as also Section 25(i) and (ii) of the Patents Act, whichvested the authorities under the said Acts to pass appropriateorders in aid of the final relief. Dr. Singhvi urged that it is insituations such as these, that the doctrine of "implied power"comes into play. Learned counsel submitted that without

or recall his order. It was held that unlike Section 151 of theCivil Procedure Code, which vests the civil courts and certaintribunals with inherent powers, the subordinate criminal courtshad no such inherent power, since there was absolutely noprovision in the Code of Criminal Procedure empowering amagistrate to exercise such powers.

20. Mr. Sibal lastly referred to the decision of this Court inTranscore Vs. Union of India [(2008) 1 SCC 125], andsubmitted that in the said case, this Court had observed thatthe Debts Recovery Tribunal is a tribunal and a creature ofstatute and it does not have inherent powers which existed inthe civil courts.

21. Mr. Sibal also submitted that apart from the decisionsrendered in the case of Morgan Stanley Mutual Fund (supra),the Supreme Court had held on several occasions that whileentertaining matters, final relief ought not to have been grantedat the interim stage. In fact, as submitted by Mr. Sibal, the courtswill not imply a power in a particular provision of the statute ifthe legislative intent behind the statute suggested a contraryview. Learned counsel submitted that implying a power toexercise the powers under Section 31 of the Act was not thelegislative intent which is easily discernible. It was urged thatimplying such a power would transform compulsory licensingto statutory licensing without any statutory mandate to do so.Mr. Sibal also reiterated the principle that power would not beimplied to displace a pre-existing vested statutory right and thecourt would not, therefore, exercise such powers as a statutoryright unless a statute expressly allowed the same. The powerto over-ride such pre-existing right had to be in express termsand could not be implied. Various other decisions were referredto by Mr. Sibal, which will only amount to repetition to what hasalready been stated.

22. Mr. Sibal submitted that the High Court erred in holdingthat the Copyright Board had power to grant an interimcompulsory licence and that when there was a dispute as to


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holding that the Copyright Board had the authority to direct thegrant of interim compulsory licences in keeping with thedoctrine of implied power, the provisions of the Copyright Actwould be rendered somewhat unworkable.

26. Dr. Singhvi urged that the Copyright Board is a quasi-judicial body discharging quasi-judicial functions and under thescheme of the Act, it has been vested with the power todetermine the reasonableness of royalties claimed byperforming rights societies and to fix the rates thereof and toconsider applications for general licences for publicbroadcasting of works. Dr. Singhvi submitted that it is in thatcontext that Section 12 of the Copyright Act would have to beread. Under Section 12, which defines the powers andprocedure of the Copyright Board, it has been stipulated thatthe Board would, subject to any rules that may be made underthe Act, have the power to regulate its own procedure, includingthe fixing of places and times of its meetings. Referring to Sub-section (7) of Section 12, Dr. Singhvi urged that the CopyrightBoard is to be deemed to be a Civil Court for certain purposesand all proceedings before the Board are to be judicialproceedings within the meaning of Sections 193 and 228 ofthe Indian Penal Code.

27. Dr. Singhvi then drew the Court's attention to Section19-A of the Copyright Act, which was inserted by amendmentwith effect from 9th August, 1984, in regard to disputes withrespect to assignment of copyright. It was submitted that thesaid provision clearly indicated that the Board was anadjudicating authority in regard to disputes between the partiesand would, therefore, be deemed to be vested with ancillarypowers to make interim orders in aid of the final relief that couldbe granted under Section 31 of the Act.

28. Dr. Singhvi urged that the Copyright Act contemplatedthe grant of three types of licences, namely :-

(i) voluntary;

(ii) compulsory; and

(iii) statutory.

Dr. Singhvi urged that Sections 30, 31 and 31-A of the Actdeal with grant of voluntary, compulsory and statutory licences.However, while Section 30 deals with grant of voluntary licencesby the owners of the copyright, Sections 31 and 31-A speakof grant of licences for broadcasting works which had beenwithheld from the public, either by the copyright owners, orwhere the owner of an Indian work is either dead or untraceable.However, Section 52 of the Act also made provision that certainacts performed by broadcasters were not to be considered asinfringement of copyright. In particular, reference was made byDr. Singhvi to Section 52(1)(j)(iv) which indicates that themaking of sound recordings in respect of any literary, dramaticor musical work would not amount to infringement of copyrightif the person making such sound recording allowed the ownerof the right or his duly authorised agent or representative toinspect all records and books of accounts relating to such soundrecording. Dr. Singhvi urged that, in any event, any decision inrespect of the above provisions would be appealable underSection 72 of the Copyright Act. Dr. Singhvi urged that thepowers now vested in the Copyright Board were, in fact,powers which had been vested in it as high a body as JudicialCommittee of the Privy Council under Section 4 of theCopyright Act, 1911, which had been passed by the Parliamentof the United Kingdom and modified in its application to Indiaby the Indian Copyright Act, 1914.

29. In support of the submissions made by him, Dr. Singhvireferred to various decisions, beginning with the decision of thisCourt in Income Tax Officer Vs. M.K. Mohammed Kunhi[(1969) 2 SCR 65], wherein the power of the Income TaxAppellate Tribunal to stay recovery of penalty was underconsideration. Although, such power was not directly vested inthe Tribunal, the High Court held that the power to order the stayor recovery of penalty is an incidental and ancillary power


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possessed by the Tribunal in its appellate jurisdiction.Reference was also made to the decision cited on behalf ofthe Appellant in Morgan Stanley's case (supra). Dr. Singhviurged that the same was no longer good law on account of thesubsequent decisions of this Court. Dr. Singhvi urged that inAllahabad Bank, Calcutta Vs. Radha Krishna Maity & Ors.[(1999) 6 SCC 755], this Court was considering the provisionsof the Recovery of Debts Due to Banks and FinancialInstitutions Act, 1993, hereinafter referred to as "the DRT Act",wherein it was held that in a Suit under Section 19(1) forrecovery of monies, the Tribunal acted within its powers inpassing an interim order to restrain the defendants fromrecovering any money from a particular party. It was held thatin view of Section 22(1) of the Act, the Tribunal could exercisepowers contained in the Civil Procedure Code and could evengo beyond the Code as long as it passed orders in conformitywith the principles of natural justice. This Court held further thatSection 19(6) of the Act did not in any manner limit thegenerality of the powers of the Tribunal under Section 22(1) andthat Section 19(6) was an enabling provision and that certaintypes of stay orders and injunctions mentioned therein could bepassed by the Tribunal, but the same could not be deemed tobe exhaustive nor restricting the Tribunal's powers only to thosetypes of injunctions or stay orders mentioned therein. It was alsoobserved that in addition, Rule 18 enabled the Tribunal to passorders to secure the ends of justice. Dr. Singhvi urged that theaforesaid decision of this Court was based on its earlierdecision in Industrial Credit & Investment Corporation of IndiaLtd. Vs. Grapco Industries Ltd. & Ors. [(1999) 4 SCC 710],wherein it had been held that the Debts Recovery Tribunal hadjurisdiction under Section 19(6) of the DRT Act to grant interimorders, since such power inheres in a Tribunal.

30. Dr. Singhvi lastly contended that the decision inRajeev Hitendra Pathak's case (supra) could not be relied uponfor a decision in this case on account of the fact that in the saidcase this Court was called upon to consider as to whether the

District Forum and the State Commission had been vested withpowers of revision, in the absence whereof they could notexercise such powers which had not been expressly vested inthem. Dr. Singhvi urged that having regard to the variousdecisions of this Court which have categorically held thatpowers to pass certain interim orders were incidental andancillary to the exercise of powers conferred on a Tribunal bythe Statute, the doctrine of implied power would stand attractedand the orders of the High Court could not, therefore, be faulted.

31. Mr. Bhaskar P. Gupta, learned Senior Advocate,appearing for some of the interveners, adopted Dr. Singhvi'ssubmissions and reiterated the concept that the Copyright Actis a complete code in itself and the parties to the dispute wouldhave to take recourse to the provisions of the Act and not theCivil Code which lends support to Dr. Singhvi's submissionsthat the "doctrine of implied power" would have to beincorporated in the provisions of the Copyright Act, as far asthe Copyright Board is concerned.

32. Mr. Gupta also raised the question as to whether duringthe pendency of an existing licence granted under Section 30,a dispute could be raised with regard to the fees charged underSection 31(1)(b) which may subsequently convert the voluntarylicence given under Section 30 of the Copyright Act into acompulsory licence under Section 31 thereof. Mr. Guptacontended that since Section 31(1)(b) of the Act contemplatesadjudication, the Copyright Board had the trappings of a quasi-judicial authority which inheres in itself the right to pass interimorders in the interest of the parties and to apply the principlesof natural justice, keeping in mind the public interest. In thisregard, Mr. Gupta also submitted that Section 75 of theCopyright Act provides that the orders for payment of moneypassed by the Registrar of Copyrights, the Copyright Board orby the High Court would be deemed to be decrees of a CivilCourt and would be executable in the same manner as a decreeof such Court. Mr. Gupta contended that the intention of the


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legislature would be clear from the scheme of the Act thatmatters relating to copyright should be dealt with by theauthorities under the Act and not the Civil Court.

33. Mrs. Prathiba Singh, learned Advocate, who appearedfor one of the parties, while reiterating the submissions madeby Dr. Singhvi and Mr. Gupta, submitted that the powers of theBoard had been gradually increased by legislation from timeto time and even in regard to the question of subsisting licencesand the grant of new licences, there could be no dispute as tothe powers vested in the Copyright Board and the orders whichit was competent to pass. Mrs. Singh, however, introducedanother dimension into the debate by contending that themembership of the Copyright Board is drawn from variousquarters. There being 14 members, it does not meet regularlyand decisions in cases are, therefore, deferred for longintervals. In fact, as pointed out by Mrs. Singh, sometimes it isnot possible to hold even one meeting in a month. In suchcases, unless the power to grant interim orders were read intothe provisions of Section 31 of the Act, there would be acomplete stalemate in regard to cases where matters werepending before the Board and the public would be deprived ofthe pleasure of listening to such music and sound broadcasting.

34. Mr. Harish Salve, learned Senior Advocate, in his turnprovided another twist to the question under consideration inurging that inherent powers exist in an appellate forum. Mr.Salve urged that this was not a case where the Copyright Boardwas not entitled to pass orders of an interim nature, but whetherit should exercise such power. Mr. Salve further urged that thepower under Section 31(1)(b) was in respect of matters whichwere already in the public domain and the transaction beingpurely of a commercial nature, the Board was only called uponto decide how much charges were required to be paid forbroadcasting music and sound recordings in respect whereofSuper Cassettes had the copyright. Mr. Salve urged thatSection 31(1)(b) merely enumerated the right of the Copyright

Board to decide and compute the amount of fees payable forthe use of the copyright, which was being withheld from thepublic. According to Mr. Salve, the essence of the CopyrightAct is the delicate balance between intellectual property rightsand the rights of access to the copyright material. In such asituation, according to Mr. Salve, a private right of copyrightwould have to give way to the public interest as contemplatedin Section 31 of the Copyright Act.

35. Replying to the submissions made on behalf of theRespondents and the interveners, Mr. Sibal urged that thepowers which were inherent in a Tribunal as against the impliedpowers, stood on a different footing and, in any event, theprovisions of Sections 19(4) and 19-A were not relevant to thedoctrine of implied power in the facts of this case.

36. Mr. Sibal submitted that the concept of public interestwas nothing but a bogey introduced on behalf of theRespondents, when the entire transaction only involved thecomputation of the fees payable to a copyright owner for useof the copyright when the same was withheld from the public.Referring to the decision between ENIL and the Appellant inEntertainment Network (India) Limited Vs. Super CassetteIndustries Limited [(2008) 13 SCC 30], Mr. Sibal referred toparagraph 116 thereof, which is extracted hereinbelow :-

"116. Section 31(1)(b) in fact does not create anentitlement in favour of an individual broadcaster. The rightis to approach the Board when it considers that the termsof offer for grant of licence are unreasonable. It, no doubt,provides for a mechanism but the mechanism is for thepurpose of determination of his right. When a claim ismade in terms of the provisions of a statute, the same hasto be determined. All cases may not involve narrowcommercial interest. For the purpose of interpretation ofa statute, the court must take into consideration allsituations including the interest of the person who intendsto have a licence for replay of the sound recording in


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respect whereof another person has a copyright. It,however, would not mean that all and sundry can fileapplications. The mechanism to be adopted by the Boardfor determining the right of a complainant has beenprovided under the Act."

Mr. Sibal urged that the decision of the High Court wasliable to be set aside and that of the Copyright Board was liableto be restored.

37. What emerges from the submissions made on behalfof the respective parties is the dispute as to the width of thepowers vested in the Copyright Board under Section 31 of theCopyright Act. There is no dispute that the Copyright Act is aCode by itself and matters relating to copyrights and grant oflicences in respect of such copyrights have been left to theCopyright Board for decision. Chapter II of the Copyright Act,1957, deals with the establishment of a Copyright Office andthe constitution of a Copyright Board and the powers andprocedure to be exercised and formulated for the functioningof the said Board. Section 11 of the Act, which comes withinthe said Chapter, provides for the constitution of a CopyrightBoard, which would hold office for such period and on suchterms and conditions as may be prescribed. Section 12enumerates the powers and procedure of the Board and isextracted hereinbelow :-

"12.Powers and procedure of Copyright Board. - (1)The Copyright Board shall, subject to any rules that maybe made under this Act, have power to regulate its ownprocedure, including the fixing of places and times of itssittings:

Provided that the Copyright Board shall ordinarilyhear any proceeding instituted before it under this Actwithin the zone in which, at the time of the institution of theproceeding, the person instituting the proceeding actually

and voluntarily resides or carries on business or personallyworks for gain.

Explanation.-In this sub-section "zone" means a zonespecified in section 15 of the States Reorganisation Act,1956. (37 of 1956).

(2) The Copyright Board may exercise anddischarge its powers and functions through Benchesconstituted by the Chairman of the Copyright Board fromamongst its members, each Bench consisting of not lessthan three members:

[Provided that, if the Chairman is of opinion that anymatter of importance is required to be heard by a largerBench, he may refer the matter to a special Benchconsisting of five members.]

(3) If there is a difference of opinion among themembers of the Copyright Board or any Bench thereof inrespect of any matter coming before it for decision underthis Act, the opinion of the majority shall prevail:

[Provided that where there is no such majority, theopinion of the Chairman shall prevail.]

(4) The [Chairman] may authorise any of itsmembers to exercise any of the powers conferred on it bysection 74 and any order made or act done in exercise ofthose powers by the member so authorised shall bedeemed to be the order or act, as the case may be, of theBoard.

(5) No member of the Copyright Board shall takepart in any proceedings before the Board in respect of anymatter in which he has a personal interest.

(6) No act done or proceeding taken by the CopyrightBoard under this Act shall be questioned on the ground


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SUPER CASSETTES INDUSTRIES LTD. v. MUSICBROADCAST PVT. LTD. [ALTAMAS KABIR, J.]

231 232

merely of the existence of any vacancy in, or defect in theconstitution of, the Board.

(7) The Copyright Board shall be deemed to be acivil court for the purposes of [sections 345 and 346 of theCode of Criminal Procedure, 1973 (2 of 1974)] and allproceedings before the Board shall be deemed to bejudicial proceedings within the meaning of sections 193and 228 of the Indian Penal Code, 1860 (45 of 1860)".

As would be noticed, the Copyright Board has beenempowered to regulate its own procedure and is to be deemedto be a Civil Court for the purposes of Sections 345 and 346of the Code of Criminal Procedure, 1973, and all proceedingsbefore the Board shall be deemed to be judicial proceedingswithin the meaning of Sections 193 and 228 of the Indian PenalCode. The provisions clearly indicate that the Copyright Boarddischarges quasi-judicial functions, which as indicated inSections 19-A, 31, 31-A, 32 and 52, requires the Board todecide disputes in respect of matters arising therefrom. In fact,Section 6 also spells out certain disputes which the CopyrightBoard has to decide, and its decision in respect thereof hasbeen made final. However, for the purposes of these appealswe are concerned mainly with Section 31, which has beenextracted hereinabove.

38. Elaborate submissions have been made regarding thepower of the Copyright Board to grant interim compulsorylicences in works withheld from the public, in relation to matterswhich were pending before it. Having considered the saidsubmissions, we are unable to accept the submissions madeby Dr. Abhishek Manu Singhvi, Mr. Bhaskar P. Gupta, Mr.Harish Salve and the other learned counsel appearing for thedifferent interveners. The Copyright Board has beenempowered in cases where the owner of a copyright in a workhas withheld the same from the public, after giving the ownerof the copyright in the work a reasonable opportunity of beingheard and after holding such inquiry as it may consider

necessary and on being satisfied that the grounds forwithholding the work are not reasonable, to direct the Registrarof Copyrights to grant to the complainant a licence to republishthe work, perform the work in public or communicate the workto the public by broadcast, as the case may be, subject topayment to the owner of the copyright of such compensationand subject to such other terms and conditions as the Boardmay determine. The language used in the Section clearlycontemplates a final order after a hearing and after holding aninquiry to see whether the ground for withholding of the workfrom the public was justified or not. There is no hint of any powerhaving been given to the Board to make interim arrangements,such as, grant of interim compulsory licences, during thependency of a final decision of an application.

39. As has been held by this Court in innumerable cases,a Tribunal is a creature of Statute and can exercise only suchpowers as are vested in it by the Statute. There is a secondschool of thought which propagates the view that since mostTribunals have the trappings of a Court, it would be deemed tohave certain ancillary powers, though not provided by theStatute, to maintain the status-quo as prevailing at the time offiling of an application, so that the relief sought for by theApplicant is not ultimately rendered otiose. While construing theprovisions of Section 14 of the Consumer Protection Act, 1986,in the Morgan Stanley Mutual Fund's case (supra), this Courtcategorically held that in the absence of any specific vestingof power, no interim relief could be granted, not even of an ad-interim nature. The decision in the recent judgment of this Courtin Rajeev Hitendra Pathak's case (supra) also supports thecase made out by Mr. Sibal to the extent that in the absenceof any express power conferred on the District Forum and theState Commission under the Consumer Protection Act, theyhad no jurisdiction to exercise powers which had not beenexpressly given to them.

40. Even the decision rendered in Bindeshwari Prasad


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Singh's case (supra), which was a decision as to thejurisdiction of a Magistrate to review or recall his order, it washeld that in the absence of any specific power in the Code ofCriminal Procedure, the Magistrate was not entitled to exercisesuch a power.

41. On the other hand, the various decisions cited on behalfof the Respondent and the interveners were in the context ofthe question as to whether a Tribunal has incidental powers,which were inherent though not specifically vested, in order topreserve the status-quo as in M.K. Mohammed Kunhi's case(supra), Allahabad Bank, Calcutta's case (supra) or even inGrapco Industries Ltd.'s case (supra), till a decision wasreached in the pending matter.

42. In the instant case, the power being sought to beattributed to the Copyright Board involves the grant of the finalrelief, which is the only relief contemplated under Section 31of the Copyright Act. Even in matters under Order XXXIX Rules1 and 2 and Section 151 of the Code of Civil Procedure, aninterim relief granting the final relief should be given afterexercise of great caution and in rare and exceptional cases. Inthe instant case, such a power is not even vested in theCopyright Board and hence the question of granting interimrelief by grant of an interim compulsory licence cannot, in ourview, arise. Mr. Salve's submission that the substratum of thescheme of Section 31 is commercial in nature and only involvescomputation of the charges to be paid to the holder of thecopyright who withholds the same from the public, is no answerto the proposition that under Section 31 only an ultimate reliefby way of grant of a licence on payment of reasonable chargesto the copyright owner to publish and/or broadcast the workcould be given. To grant an interim compulsory licence duringthe stay of the proceedings would amount to granting the finalrelief at the interim stage, although the power to grant such reliefhas not been vested in the Board.

43. It is no doubt true, that Tribunals discharging quasi-judicial functions and having the trappings of a Court, aregenerally considered to be vested with incidental and ancillarypowers to discharge their functions, but that cannot surely meanthat in the absence of any provision to the contrary, such Tribunalwould have the power to grant at the interim stage the final reliefwhich it could grant.

44. As also indicated hereinbefore, such incidental powerscould at best be said to exist in order to preserve the status-quo, but not to alter the same, as will no doubt happen, if aninterim compulsory licence is granted. If the legislature hadintended that the Copyright Board should have powers to grantmandatory injunction at the interim stage, it would have vestedthe Board with such authority. The submission made that thereis no bar to grant such interim relief in Section 31 has to berejected since the presence of a power cannot be inferred fromthe absence thereof in the Statute itself.

45. In the aforesaid circumstances, we have no hesitationin allowing the appeals and setting aside the impugnedjudgment and order of the Division Bench of the High Court.The Appeals are, accordingly, allowed. There will be no orderas to costs.

K.K.T. Appeals allowed.


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236[2012] 4 S.C.R. 235

SUPREME COURT BAR ASSOCIATION & ORS.v.

B.D. KAUSHIKI.A. NO.1 OF 2012

IN(Civil Appeal Nos. 3401 of 2003 etc.)

MAY 7, 2012

[ALTAMAS KABIR & SURINDER SINGH NIJJAR, JJ.]

Bar Associations:

Supreme Court Bar Association – Eligibility of themembers to contest and vote at the election to the ExecutiveCommittee – Directions given by Supreme Court in itsjudgment dated 26.9.2011 – Implementation Committeecarrying out the exercise to identify the regular practitionersin Supreme Court – Propriety of General Body Meeting heldon 16.1.2012 and its resolutions – Held: Although the GeneralBody Meeting had been convened to consider theimplications of the judgment dated 26.9.2011, what transpiredlater is a complete departure therefrom – The members of theSCBA present at the meeting were bent upon their ownagendas, which were directed against the three seniormembers of the Bar, who had been appointed as membersof the Implementation Committee, together with the President– This was not a method which should have been resorted tofor the said purpose – The Court cannot accept the mannerin which the purported General Body Meeting of the SCBAwas conducted on 16.1.2012, and the Resolutions adoptedtherein, as well as the resolutions purportedly adopted by theExecutive Committee of the SCBA on 18.1.2012 – All theResolutions purported to have been adopted in the GeneralBody Meeting of the SCBA held on 16.1.2012, and themeeting of the Executive Committee being in flagrant

violation of the judgment delivered by the Court on 26.9.2011are held to be invalid and are set aside – Consequently, thecomposition of the Office Bearers of the SCBA prior to theadoption of the alleged resolutions of 16.1.2012, standsrestored – The Implementation Committee shall, therefore,continue with the work assigned to it for identification of themembers of the SCBA eligible to vote in the elections in termsof the directions given in the judgment dated 26.9.2011 –Thereafter, the SCBA shall set the dates for the electionschedule, including publication of the list of members of theSCBA eligible to vote in the elections, so that the electionscan be held once the final list is approved and published –Rules and Regulations of the Supreme Court Bar Association– r.18.

Constitution of India, 1950:

Art. 142 read with Art.141 – Expression ‘matter pendingbefore it’ occurring in Art. 142 – Held: Would include mattersin which orders of the Supreme Court were yet to beimplemented when, particularly, such orders were necessaryfor doing complete justice to the parties to the proceedings –When a judgment has been delivered by the Supreme Court,it is the obligation of all citizens to act in aid thereof and toobey the decision and the directions contained therein, in viewof the provisions of Art. 141 until and unless the same aremodified or recalled – It is the duty of all the members of theSCBA to abide by and to give effect to the judgments of theCourt and not to act in derogation thereof – Once thedirections had been given in the judgment disposing of thetwo civil appeals, the members of the SCBA were bound bythe directions contained therein and the said directions hadto be obeyed, however aggrieved a member of the SCBAmight be.

In pursuance of the directions issued by theSupreme Court in its judgment dated 26.9.20111 passed

235 1. [2011] 15 SCR 736.


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in Civil Appeal Nos. 3401 and 3402 of 2003, and toimplement the Resolution of “One Bar One Vote”adopted by the Supreme Court Bar Association (SCBA)in the General Body Meeting of 18.2.2003, theImplementation Committee issued a questionnaire to allthe Members of the SCBA and in order to identify regularpractitioners of the SCBA, adopted certain criteria in itsmeetings held on 11.1.2012 and 15.1.2012. When theexercise was in progress, meanwhile, in the General BodyMeeting which was scheduled to be held on 16.1.2012,apart from the regular practitioners, a large number ofpersons who were not even members of the SCBA, werestated to have assembled at the venue of the meetingand obstructed the elected President of the SCBA fromconducting the meeting. I.A. 1 of 2012 in C.A. 3401 of 2003was filed setting out in detail the events of the GeneralBody Meeting convened on 16.1.2012. The applicantprayed that in furtherance of the judgment dated26.9.2011, only those Members of the SCBA, whosenames would be identified and declared by theImplementation Committee, would be entitled toparticipate in the elections and/or General Body Meetingof the SCBA or to vote either in the election or in theGeneral Body Meeting or to sign any requisition. Prayerwas also made for a direction that the meeting held on16.1.2012 and the decisions purportedly taken thereinwere null and void.

Disposing of the I. As. and the contempt petition, theCourt

HELD: 1.1. In the two appeals, one of the majorissues which was canvassed was that in connection withthe holding of elections to the Executive Committee of theSCBA, one of the methods resorted to for the purposeof ensuring a candidate’s success in the election was toenroll a large number of members to vote for a particular

candidate. The same had given rise to a lot of discussionand deliberation which ultimately resulted in theamendment of Rule 18 of the Rules and Regulations ofthe SCBA regarding the eligibility of such members tocontest and vote at any election. It was also proposedthat a member who exercised his right to vote in any HighCourt or District Court, Advocates’ Association or BarAssociation, would not be eligible to contest for any postof the SCBA or to cast his vote at the elections; and thatevery member before casting his vote would, in aprescribed form, give a declaration that he had not votedin any other election of advocates in the High Court/District Court Bar Association. Any false declarationwould invite automatic suspension of the member fromthe membership of the SCBA for a period of three years.The requisition dated 10.1.2003, was placed forconsideration at a Special General Body meeting of theSCBA on 18.2.2003, and the amendment was adopted bya majority of 85% of the members present and voting.Despite an attempt by some of the members to stall theproceedings, in the meeting of 10.3.2003, it was resolvedto constitute an Implementation Committee to implementthe Resolution on “One Bar One Vote” which had beenadopted at the General Body Meeting on 18.2.2003. [para43] [266-H; 267-A-G]

1.2. The matter was considered in detail by theSupreme Court in the appeals. It was felt necessary toidentify the regular practitioners for the purpose ofestablishing the eligibility of the members who would beentitled to vote in the elections and, accordingly, theCourt, in its judgment dated 26.9.2011, directed that forthe said purpose the best course would be to adopt themethodology set out in Vinay Balchandra Joshi’s* case,and, thereafter, it would be open to the Office Bearers ofthe SCBA or a Small Committee, which may be appointedby the SCBA, consisting of three Senior Advocates, to


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collect information and to prepare a list of regularmembers practising in this Court and another separatelist of members not regularly practising in this Court anda third list of temporary members of the SCBA. Afterplacing the list on the SCBA website and invitingobjections, the Committee could then take a final decisionwhich would be final and binding on the members of theSCBA, and, thereafter the final list of regular practitionersof the Supreme Court would be displayed by the SCBA.[para 45] [268-B-E]

*Vinay Balchandra Joshi Vs. Registrar General ofSupreme Court of India (1998) 7 SCC 461 – relied on

1.3. Once the directions had been given in thejudgment disposing of the two civil appeals, the membersof the SCBA were bound by the directions containedtherein and the said directions had to be obeyed,however aggrieved a member of the SCBA might be. Theagenda for the meeting of the General Body which wasconvened on 16.1.2012, to consider the implications ofthe judgment dated 26.9.2011 did not permit the membersto consider any other agenda for which notice had notbeen given, whatever may have been the mood of themembers present at the meeting. [para 46] [268-F-G]

Claude-Lila Parulekar (Smt.) Vs. Sakal Papers (P) Ltd.& Ors. 2005 (2) SCR 1063 = (2005) 11 SCC 73; LifeInsurance Corporation of India Vs. Escorts Ltd. & Ors. 1985(3) Suppl. SCR 909 = (1986) 1 SCC 264 – cited.

2.1. The Resolutions adopted at the General BodyMeeting on 16.1.2012, and, thereafter, on 18.1.2012 werenot only an affront to the majesty and dignity of theSupreme Court, but were outright contumacious. It ishighly regrettable that the members of the Supreme CourtBar Association, which is the leading Bar Association inthe country and whose members are expected to provide

leadership and example to other Bar Associations of thecountry and to act in aid of the judgments of the Courts,should have resorted to a Resolution not to abide by thejudgment and to even act in defiance thereof by resolvingthat all members of the Bar Association would be entitledto vote in the elections. [para 46] [268-H; 269-A-C]

2.2. The attempt to justify the conduct of themembers of the SCBA at its meeting held on 16.1.2012cannot be supported. The Senior Advocate, who waspresent at the meeting and was stated to have chairedthe meeting in no uncertain terms stated that he had notchaired the General Body Meeting convened on16.1.2012, and was not a party to the Resolution whichwas adopted at such meeting. [para 46] [269-C-E]

2.3. Although the General Body Meeting had beenconvened to consider the implications of the judgmentdated 26.9.2011, what transpired later is a completedeparture therefrom. The members of the SCBA presentat the meeting were bent upon their own agendas, whichwere directed against the three senior members of theBar, who had been appointed as members of theImplementation Committee, together with the President.This was not a method which should have been resortedto for the said purpose. The meeting degenerated into achaotic situation in which various things were done,which were not in accordance with the provisions of theRules and Regulations of the SCBA, and were against thenormal rules of decorum and cannot be supported. [para47] [269-G-H; 270-A-B]

2.4. The manner in which the three members of theImplementation Committee whose names had beenreferred to in the judgment dated 26.9.2011, were treated,speaks volumes of the manner in which the Members ofthe SCBA conducted themselves. If any member is


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aggrieved by the actions of any other member and seekshis removal from the membership of the SCBA, the rulesprovide the manner in which the same is to be done andcertainly not arbitrarily. It is no doubt true, that some ofthe members were aggrieved by the methodologyadopted by the Implementation Committee for preparingthe list of eligible voters for the election, but the same wasdone pursuant to the directions given by this Court in itsjudgment dated 26.9.2011. If the members were aggrievedby the questionnaire which was promulgated, nothingprevented them from approaching this Court and askingfor modification of the contents thereof. [para 47] [270-B-E]

2.5. The Court cannot accept the manner in which thepurported General Body Meeting of the SCBA wasconducted on 16.1.2012, and the Resolutions adoptedtherein, some of which the members themselves wereunwilling to support, as well as the same resolutionspurportedly adopted by the Executive Committee of theSCBA on 18.1.2012. [para 47] [270-E-F]

3.1. The need to implement the directions containedin the judgment does not cease upon the judgment beingdelivered. In order to enforce its orders and directions,the Supreme Court can take recourse to the powersvested in it under Art. 142 of the Constitution to docomplete justice to the parties. In such cases, the lis doesnot cease and the expression “matter pending before it”mentioned in Art. 142 of the Constitution, would includematters in which orders of the Supreme Court were yetto be implemented, when particularly such orders werenecessary for doing complete justice to the parties to theproceedings. To take any other view would result inrendering the orders of the Supreme Court meaningless.[para 49] [271-A-C]

Supreme Court Bar Association Vs. Union of India & Anr.1998 (2) SCR 795 = (1998) 4 SCC 409 – relied on.

Durgesh Sharma Vs. Jayshree 2008 (13) SCR 1056 =(2008) 9 SCC 648; R. Antulay Vs. R.S. Nayak & Anr. 1988(1) Suppl. SCR 1 = (1988) 2 SCC 602; Union CarbideCorporation Vs. Union of India 1991 (1) Suppl. SCR 251 =(1991) 4 SCC 584 - referred to.

3.2. When a judgment has been delivered by thisCourt, it is the obligation of all citizens to act in aid thereofand to obey the decision and the directions containedtherein, in view of the provisions of Art. 141 of theConstitution, until and unless the same are modified orrecalled. Therefore, each of the Resolutions said to havebeen adopted at the purported meeting of the GeneralBody of the SCBA on 16.1.2012, do not muster scrutinyand must be held to be in violation of Art. 141 of theConstitution and cannot, therefore, be countenanced.Apart from the fact that the agenda for the meeting didnot include the matters in respect whereof the resolutionshave been adopted, the resolutions themselves, being inflagrant violation of the judgment delivered by this Courton 26.9.2011, have to be set aside. [para 50] [272-B-E]

3.3. It is the duty of all the members of the SCBA toabide by and to give effect to the judgments of this Courtand not to act in derogation thereof. The purportedresolution expelling the three senior members of theImplementation Committee, appointed under thedirections of this Court, from the primary membership ofthe Association, speaks volumes as to the illegalitythereof and the deliberate and willful attempt on the partof the members, who are alleged to have passed such aresolution to over-reach the orders of this Court. Thesame is sufficient ground to set aside the resolutionspurportedly adopted at the meeting held on 16.1.2012.[para 50] [272-E-G]


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3.4. All the Resolutions purported to have beenadopted in the General Body Meeting of the SCBA heldon 16.1.2012, and the meeting of the ExecutiveCommittee dated 18.1.2012 are held to be invalid and areset aside. Consequently, the composition of the OfficeBearers of the SCBA prior to the adoption of the allegedresolutions of 16.1.2012, stands restored. [para 52] [273-B-C]

3.5. The alleged resolution expelling the three seniormembers of the SCBA constituting the ImplementationCommittee appointed under the directions of this Court,is set aside. The Implementation Committee shall,therefore, continue with the work assigned to it foridentification of the members of the SCBA eligible to votein the elections in terms of the directions given in thejudgment dated 26.9.2011. However, if any member of theSCBA is aggrieved by the methodology adopted by theImplementation Committee for identification of sucheligible members, he/she may make a representation tothe Executive Committee of the SCBA, which will lookinto such objections and take a decision thereupon and,if necessary, to apply to the Court, before further stepsare taken by the Implementation Committee in regard toidentification of members eligible to vote at the elections.[para 52] [273-C-F]

3.6. The process of identifying the members of theSCBA eligible to vote in the elections for selection of themembers of the Executive Committee must be completedwithin four weeks from the date of individual objectionsreceived, if any, are decided finally. Thereafter, the SCBAshall set the dates for the election schedule, includingpublication of the list of members of the SCBA eligible tovote in the elections, so that the elections can be heldonce the final list is approved and published. [para 52][273-G-H; 274-A]

Case Law Reference:









CIVIL APPELLATE JURISDICTIONI.A. 1 & 3.

INCivil Appeal No. 3401 of 2003.

ANDI.A. No. 4

INI.A. No. 1

INCivil Appeal No. 3401 of 2003 etc.

From the Judgment & Order dated 05.04.2003 of the CivilJudge, Delhi in Civil Suit No. 101 of 2003.

WITHI.A. No. 1 & 3 in C.A. No. 3402 of 2003.

Conmt. Pet. (C) No. 45 of 2012.

Ashok Desai, Rakesh Khanna, Dinesh Dwivedi, S.P.Singh, Ranjit Kumar (A.C.), Rajesh Aggarwal, Mridul Aggarwal,N. Rajaraman, Dr. Pravin Kumar Mutreja, Ashok Kumar(Appellant-In-Person), Arun Kumar, Pareena Swarup, H.L.Srivastava (for Milind Kumar), B.K. Choudhary, D.K. Thakur,


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Baldev Atreya, Sushil Kumar, Ranjit Kumar, ParmanandPandey, Ravi Shankar Kumar, B.P. Yadav, Yugal KishorePrasad, Rajesh Ranjan Rajesh, Devendra Jha, Nitin KumarThakur, Dinesh Kumar Garg, Caveator in person, Shivaji M.Jadhav, Md. Izhar Alam, M.P. Singh, Parmanand Pandey, S.Simson for the appearing parties.


ALTAMAS KABIR, J. 1. I.A. No.1 of 2012 has been filedby the Supreme Court Advocate-on-Record Association(SCAORA) in Civil Appeal Nos.3401 and 3402 of 2003, whichwere disposed of on 26th September, 2011, and form thegenesis of the events leading to the filing of the saidapplication. It has been a painful experience for us to have hadto hear this matter as it involves two sections of the SupremeCourt Bar Association whose unbecoming posturing has castdark shadows on the functioning of the Bar Association evenin the eyes of the general public and the litigants who throngthe Supreme Court each day for their cases.

2. While Civil Appeal No.3401 of 2003 was filed by threeAppellants, namely, (i) Supreme Court Bar Association (Regd.)through its Honorary Secretary, Mr. Ashok Arora; (ii) Mr. AshokArora in his capacity as the Honorary Secretary of the SupremeCourt Bar Association; and (iii) Ms. Sunita B. Rao, Coordinator,Implementation Committee, Supreme Court Bar Association,(hereinafter referred to as "SCBA"), on the other hand, CivilAppeal No.3402 of 2003 has been filed by the Supreme CourtBar Association through its Honorary Secretary. Both theAppeals are directed against the interim order dated 5th April,2003, passed by the learned Civil Judge on an application filedunder Order XXXIX Rules 1 and 2 read with Section 151 ofthe Code of Civil Procedure, 1908, filed in Civil Suit Nos.100and 101 of 2003. By the common order, the Appellants wererestrained from implementing the Resolution dated February 18,2003, amending Rule 18 of the Rules and Regulations of SCBAtill the final disposal of both the suits. While Shri B.D. Kaushik

is the sole Respondent in Civil Appeal No.3401 of 2003, ShriA.K. Manchanda is the sole Respondent in Civil AppealNo.3402 of 2003. Both the Respondents are Advocates whoare practising in Delhi and are Members of the SCBA, theDelhi Bar Association and the Bar Association of the Tis HazariCourts, Delhi.

3. The Supreme Court Bar Association is a Societyregistered under the Societies Registration Act, 1860, on 25thAugust, 1999, under Registration No.35478 of 1999. In keepingwith the provisions of the Societies Registration Act, 1860, theSCBA has framed its Memorandum of Association and Rulesand Regulations, Rule 4 whereof divides the Members into fourseparate classes, namely, :-

(i) Resident Members;

(ii) Non-Resident Members;

(iii) Associate Members; and

(iv) Non-Active Members.

Rule 5(v)(a) provides that in terms of Rule 5, an Applicantfound to be suitable to be made a Member of the Associationwould be made Member initially on temporary basis for a periodof two years. It also provides that a person who is made sucha Member, would be identified as a temporary Member whowould be entitled to avail the facilities of the Association, suchas library and canteen, but would not have a right to participatein general meetings, as prescribed in Rule 21 or to contest andvote at the elections, as provided in Rule 18.

4. On 23rd January, 2003, the Office of the SCBA receiveda requisition dated 10th January, 2003, signed by 343 Membersseeking an amendment to Rule 18 regarding the eligibility ofthe Members to contest and vote at an election. It wasproposed that the Member, who exercised his right to vote inany High Court or District Court Advocates/Bar Association,


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247 248SUPREME COURT BAR ASSOCIATION & ORS. v.B.D. KAUSHIK [ALTAMAS KABIR, J.]

would not be eligible to contest for any post of the SCBA or tocast his vote at the elections. The said requisition dated 10thJanuary, 2003, was considered in the meeting of the ExecutiveCommittee of the SCBA on 1st February, 2003 and a decisionwas taken to hold a Special General Body Meeting on 18thFebruary, 2003, to consider the requisition. It appears thatnotice for the said General Body Meeting was issued by theSCBA on 6th February, 2003, and copies of the same weresent to the Members along with the cause list. The notice wasalso displayed on the Notice Board of the office of the SCBAsituated in the Supreme Court premises. The notices were alsosent to different Bar Associations at Delhi, including the DelhiBar Association. On 18th February, 2003, the General BodyMeeting was convened in which 278 Members participated.Some of the Members of the Association had spoken againstthe requisition, but when the Resolution proposing theamendment in Rule 18 of the Rules was put to vote, it waspassed by a majority of 85% of the Members present andvoting. Subsequently, at a meeting of the Executive Committeeconvened on 3rd March, 2003, a Resolution was adopted tohold election of the Office Bearers for the next session and forthe constitution of the Election Committee on 25th April, 2003.An Election Committee of three Members of the SCBA wasconstituted for the purpose of conducting the election. In thesaid meeting, a requisition signed by 237 Members of theSCBA to recall the Resolution dated 18th February, 2003, wastaken up for consideration, but deferred on account of the factthat the elections had been declared. Moreover, in the meetingof the Executive Committee held on 10th March, 2003, it wasresolved to constitute an Implementation Committee toimplement the Resolution of "One Bar One Vote", which wasadopted in the General Body Meeting of 18th February, 2003.

5. The apparent differences, which have surfaced betweenthe two groups of Members within the SCBA, resulted in Mr.B.D. Kaushik filing Suit No.100 of 2003 in the Court of ShriSanjeev Jain, Commercial Civil Judge, Delhi, challenging the

validity of the Resolution adopted by the Executive Committeeof the SCBA on 18th February, 2003. While seeking a decreefor a declaration that the Resolution dated 18th February, 2003,was illegal and ineffective, the Plaintiff also prayed for a decreeof perpetual injunction to restrain the SCBA and the OfficeBearers from implementing the said Resolution dated 18thFebruary, 2003, in the elections of the SCBA which wereproposed to be held on 25th April, 2003. A further prayer wasmade to restrain the SCBA from debarring any of the Membersof the SCBA who had already paid their subscription fromcasting their votes in the elections which were scheduled to beheld on 25th April, 2003. A similar Suit No.101 of 2003 wasfiled before the same learned Judge by Shri A.K. Manchanda,seeking the same relief as had been sought by Mr. B.D.Kaushik in his Suit No.100 of 2003.

6. As indicated hereinbefore, applications were filed by thePlaintiffs in both the suits under Order XXXIX Rules 1 and 2read with Section 151 of the Code of Civil Procedure to restrainthe Defendants, who are the Appellants in the two civil appeals,from implementing the Resolution dated 18th February, 2003,till the final disposal of the suits. By a common order dated 5thApril, 2003, the learned Judge allowed the two applicationsfiled for injunction and restrained the Appellants herein fromimplementing the Resolution dated 18th February, 2003,amending Rule 18 of the Rules and Regulations of the SCBA,till the final disposal of the suits.

7. The Supreme Court Bar Association through itsHonorary Secretary thereupon filed the two Civil AppealNos.3401 and 3402 of 2003 against the said common orderdated 5th April, 2003, passed by the learned Civil Judge, Delhi.Both the matters were placed before the Court in the mentioninglist of 10th April, 2003, when the matters were taken on Boardand leave was granted. Pending the proceedings, the commonorder passed by the Trial Court was also stayed. It was alsomade clear that if any elections were held, the same would be


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identify the advocates who actually practised in the SupremeCourt in keeping with the criteria adopted by this Court forallotment of chambers in Vinay Balchandra Joshi Vs.Registrar General of Supreme Court of India [(1998) 7 SCC461]. Mr. Rao submitted that the said criteria could be adoptedin identifying the regular practitioners in the Supreme Court. Inthe judgment dated 26th September, 2011, the Hon'ble Judgeshad recorded that the learned advocates who had appearedin the matter had urged the Court to give guidelines/directionsfor effective implementation of the amended rule which projectsthe principle of "One Bar One Vote". Accepting the submissionsfor the need to identify the members of the SCBA who regularlypractised in the Supreme Court, and also taking note of Mr.Rao's suggestions, the Court directed that the criteria adoptedby this Court for allotment of chambers, as explained in VinayBalchandra Joshi's case (supra), should be adopted by theSCBA in this case also. The Court also observed that toidentify regular practitioners in the Supreme Court, it would beopen to the Office Bearers of the SCBA or a small Committeeappointed by the SCBA, consisting of three senior advocates,to collect information about those members who had contestedelections in any of the Court-annexed Bar Associations, suchas, the High Court Bar Association, District Court BarAssociation, Taluka Bar Association, etc., from 2005 to 2010.The Committee of the SCBA to be appointed was, inter alia,directed as follows :

"The Committee of SCBA to be appointed is herebydirected to prepare a list of regular members practisingin the Supreme Court and another separate list ofmembers not regularly practising in the Supreme Courtand third list of temporary members of the SCBA. The listswere directed to be put up on the SCBA website and alsoon the SCBA notice board. The committee was alsodirected to send a letter to each member of the SCBAinforming him about his status of membership on or before28th February, 2012. An aggrieved member would be

subject to the result of the Appeals. Thereafter, this Courtappointed Mr. Ranjit Kumar, learned Senior Advocate, asAmicus Curiae to assist the Court in the two matters. In addition,the Court also requested the learned Attorney General to assistthe Court. Accordingly, the Appeals were taken up for hearingin the presence of the Amicus Curiae, the learned AttorneyGeneral, Mr. Rajesh Aggarwal, who appeared on behalf of theAppellants and Mr. Dinesh Kumar Garg, learned Advocate, whoappeared on behalf of the original plaintiffs. Since the matterinvolved the learned Advocates practising in the SupremeCourt, the Court also heard senior counsel Mr. P.P. Rao, theformer President of the SCBA, Mr. Pravin Parekh, the presentPresident of the SCBA and Mr. Sushil Kumar Jain, thePresident of SCAORA. The Court also considered theMemorandum of Association of SCBA as well as its Rules andRegulations.

8. During the hearing, one of the more important issuesthat surfaced was the escalating number of Members of theSCBA to about 10,000 Members, of whom only around 2,000Members were said to be regularly practising in the SupremeCourt. The manner in which the membership was infiltrated wasalso brought to the notice of the Court and a definite anddeliberate allegation was made that out of the 10,000 Membersof the SCBA, not more than 2,000 Members were seen toattend the Supreme Court regularly and the remaining 8,000Members are seen in the Supreme Court premises only on theday of the SCBA elections. It was alleged that apart from theabove, these 8,000 floating members had no interestwhatsoever in the functioning of the SCBA or the well-being ofits Members, or even the functioning of the Supreme Court ofIndia as a Court.

9. Mr. P.P. Rao, learned Senior Counsel, and a pastPresident of the SCBA, with a lot of experience behind him,asserted that in view of the overwhelming number of advocatesadmitted to the membership of the SCBA, it was necessary to


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entitled to make a representation within 15 days from thedate of receipt of the letter from the SCBA to theCommittee, which is to be appointed by the SCBA."

10. It was subsequently mentioned in the judgment thatonce a declaration had been made by the Committee, it wouldbe valid till it was revoked and once it was revoked, the Memberwould forfeit his right to vote or contest any election to any postto be conducted by the SCBA, for a period of three years fromthe date of revocation. It was also categorically indicated thatthe Members of the SCBA, whose names did not figure in thefinal list of regular practitioners, would not be entitled to eithervote at an election of the Office Bearers of the SCBA or tocontest any of the posts for which elections would be held bythe SCBA. On the suggestion of the SCBA, the Hon'ble Judgesrecommended the names of Mr. K.K. Venugopal, Mr. P.P. Rao,and Mr. Ranjit Kumar, learned Senior Advocates, practising inthe Supreme Court, for constituting the ImplementationCommittee, subject to their consent and convenience.

11. As it appears from the materials disclosed before us,the three aforesaid senior members of the Bar, whose nameshad been suggested, were ultimately appointed by the SCBAto be the members of the Implementation Committee toimplement the directions given by the Hon'ble Judges in CivilAppeal Nos.3401 and 3402 of 2003.

12. For the purpose of implementing the directions of thisCourt contained in the judgment dated 26th September, 2011,the Implementation Committee issued a Questionnaire to all theMembers of the SCBA. Furthermore, in order to identify theregular practitioners of the Court, the ImplementationCommittee adopted certain criteria vide its Resolution dated11th January, 2012, and the Members who fulfilled the saidcriteria were to be treated as regular practitioners of this Court,along with the 754 Members to whom Chambers had alreadybeen allotted or whose names were already included in theapproved Waiting List for allotment of Chambers. The

Resolution adopted by the Implementation Committee in itsmeeting held on 11th January, 2012, is reproducedhereinbelow :-

"RESOLUTION

1. The Implementation Committee of the SupremeCourt Bar Association, in its meeting held on11.01.2012 at 1:10 p.m. has resolved as follows:

2. In view of the directions of the Supreme Court ofIndia, in its judgment in SCBA Vs. B.D. Kaushik,to the effect that "the Committee of the SCBA tobe appointed is hereby directed to prepare a listof regular members practising in this Court……",the following categories of members of SCBA, inaddition to the list of members already approvedby the Implementation Committee, are entitled tovote at, and contest, the election of the officebearers of the SCBA as 'regular memberspractising in this Court':

(i) All Advocates on Record who have filed casesduring the calendar year 2011.

(ii) All Senior Advocates designated as SeniorAdvocates by the Supreme Court of India, who areresident in Delhi and attending the Supreme Courtof India.

(iii) All members who subscribed to any of the causelists of the Supreme Court of India during thecalendar year 2011.

(iv) All members who have been members of the SCBAfor the last 25 years, commencing 01.01.1986, andhave been paying subscription to the SCBAregularly, in each one of the 25 years.


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3. The list of such members who are eligible to voteand contest elections will be put up on the SCBAnotice board for the information of all members andwill also be circulated in the usual manner includingcirculation with the daily cause list. Copies of thislist will also be available at the reception desk inLibrary I.

4. The persons whose names figure in this list neednot reply to the questionnaire issued earlier.

Sd/- Sd/- Sd/-

K.K. VENUGOPAL P.P. RAO RANJIT KUMAR"

13. Thereafter, pursuant to a request made by some of theMembers of the SCBA to the Implementation Committee, thesaid Committee by its Resolution dated 15th January, 2012,included two other categories of Members who were to betreated as regular Members of the SCBA, namely :-

(i) All Members of the SCBA, who have attended theSupreme Court of India on at least 90 days in theCalendar Year 2011, as established from thedatabase showing the use of Proximity Cardsmaintained by the Registry of the Supreme Courtof India; and

(ii) All Live Members of the SCBA, other thantemporary Members, as on 31.12.2011.

14. While the aforesaid exercise was being undertaken bythe Implementation Committee, on 12th January, 2012, about240 Members of the SCBA requested the convening of aGeneral Body Meeting of the SCBA. As the ExecutiveCommittee of the SCBA had at its meeting held on 6th January,2012, already decided to call such Meeting on 16th January,

2012, a Circular in this regard was issued informing theMembers that the Meeting would be held on 16th January,2012. It is alleged that on 16th January, 2012, apart from theregular practitioners, a large number of persons who were noteven members of the SCBA, assembled at the venue of themeeting and obstructed Shri P.H. Parekh, the electedPresident of the SCBA, from conducting the meeting.

15. In view of the aforesaid circumstances, Mrs. B. SunitaRao, learned Advocate and the Secretary of the ApplicantAssociation, filed an application for directions, setting out indetail the events of the General Body Meeting convened on16th January, 2012, to consider the implementation of therecommendations of the Implementation Committee. In the saidbackground, the Applicant prayed that in furtherance of thejudgment dated 26th September, 2011, only those Membersof the SCBA, whose names would be identified and declaredby the Implementation Committee, consisting of Shri K.K.Venugopal, Shri P.P. Rao and Shri Ranjit Kumar, SeniorAdvocates, would be entitled to participate in the elections and/or General Body Meeting of the SCBA or to vote either in theelection or in the General Body Meeting or to sign anyrequisition. Among the other prayers was a prayer for adirection that the meeting held on 16th January, 2012, and thedecisions purportedly taken therein, were null and void. Adirection was also sought that the Implementation Committeecomprised of Shri K.K. Venugopal, Shri P.P. Rao and ShriRanjit Kumar, Senior Advocates, and no other person, shouldbe allowed to complete the task of implementing the judgmentdated 26th September, 2011.

16. The said two applications were taken up forconsideration and extensive submissions were made, both insupport of and against the reliefs sought for therein.

17. Appearing on behalf of the Appellant Association, Mr.Ashok Desai, learned Senior Advocate, submitted that theevents which occurred on 16th January, 2012, at the


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Requisition Meeting convened at the instance of some of themembers of the SCBA, were highly condemnable and left muchto be desired. Mr. Desai submitted that after Mr. P.H. Parekh,the elected President of the SCBA had been shouted down, itwas unceremoniously declared that he had resigned and hisresignation from the post of President of the SCBA had beenaccepted in the meeting by a Resolution said to have beenadopted at the meeting itself. Mr. Desai submitted that seeingthe manner in which the meeting was being taken over by acertain section of the persons present at the venue of themeeting, Mr. Parekh requested Mr. Ram Jethmalani, learnedSenior Advocate and a former President of the SCBA, topreside over and conduct the meeting. Mr. Desai furthersubmitted that even Mr. Ram Jethmalani was not permitted topreside over the meeting and Mr. Pramod Swarup, a SeniorAdvocate and Member of the Executive Council, was prevailedupon to preside over the meeting, where certain resolutionswere allegedly adopted, which were not only unlawful, but evencontumacious.

18. Mr. Desai then referred to the letter dated 17th January,2012, addressed by one Mr. Arun Kumar, Advocate, to Hon'blethe Chief Justice of India enclosing copies of the Resolutionpurportedly passed by the Members of the SCBA on 16thJanuary, 2012, in its Special General Meeting. The saidResolution purported to have been adopted on 16th January,2012, is extracted hereinbelow :-

"RESOLUTION

Special General Body Meeting held on 16.01.2012 at4.15 PM at Supreme Court Lawns passed thefollowing Resolutions through Voice Vote and Showof Hands :

The Special General Body of the SCBA, presided over byMr. Ram Jethmalani, Sr. Advocate (who was invited to

preside over the meeting by President Mr. P.H. Parekh),has resolved that :

(1) Under the Rule making powers of SCBA (GeneralBody) it is resolved that the judgment of Hon'bleSupreme Court dated 26.9.2011 passed in thecase of HCBA Vs. B.D. Kaushik should not begiven effect to.

(2) The Implementation Committee proposed by theHon'ble Supreme Court vide its judgment dated26th September, 2011 passed in the case ofSCBA Vs. B.D. Kaushik has itself ignored thejudgment and is left with no authority to issue anylist of the regular practicing Members of SCBA asit has acted in a manner which is detrimental to theinterest of Members of SCBA and, therefore, theImplementation Committee stands dissolved.

(3) The Members of Implementation Committee,namely, (i) Shri P.P. Rao, Sr. Advocate, (ii) ShriK.K. Venugopal, Sr. Advocate, and (iii) Shri RanjitKumar, Sr. Advocate, are forthwith expelled from thePrimary Membership of the SCBA.

(4) All the active Members of SCBA, without anyclassification, will be eligible to vote in the annualelections, subject to their clearing the annualsubscription/ dues and filing of the DeclarationForm.

(5) Mr. P.H. Parekh, President of SCBA has publiclyannounced his resignation from his post withimmediate effect. His resignation is forthwithaccepted by the General Body.

The Meeting ended with thanks to the Chair.


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Resolution signed by more than 400 SCBA Memberspresent during the Special General Body Meeting."

19. Mr. Desai also drew our attention to the minutes of themeeting of the Executive Committee purported to have beenheld on 18th January, 2012, chaired by Mr. Pramod Swarup,Senior Executive Member, who had purportedly chaired theGeneral Body Meeting held on 16th January, 2012. Mr. Desaipointed out from the minutes that the same resolution which hadbeen adopted at the General Body Meeting of 16th January,2012, was also adopted at the purported meeting of theExecutive Committee held on 18th January, 2012.

20. On the resolutions said to have been adopted both atthe Special General Body Meeting and the meeting of theExecutive Committee of the SCBA allegedly held thereafter, Mr.Desai submitted that the said resolutions are per se indisregard of the judgment of this Court in SCBA Vs. B.D.Kaushik and are, therefore, null and void. Mr. Desai alsopointed out that the resolution starts by recording that "TheSpecial General Meeting of the SCBA was presided over byMr. Ram Jethmalani, Sr. Advocate", but Mr. Ram Jethmalani,who was present in the Court stated that he did not preside overthe meeting and he had also expressed his view that everybodyshould speak in a decorous manner. Mr. Parekh, the Presidentand all concerned parties should be given a full hearing and allgrievances should be ventilated in accordance with law. Mr.Desai submitted that the statement made by Mr. RamJethmalani in Court had not been contradicted by anyone.

21. Mr. Desai also submitted that the Special General BodyMeeting of the SCBA had been convened on 16th January,2012, only for the purpose of considering the implication of thejudgment dated 26th September, 2011, passed in Civil AppealNos.3401 and 3402 of 2003, and the agenda of the saidmeeting clearly reflected the same. Mr. Desai submitted thatthere was no suggestion that the meeting was held to consider:

(a) that the validity of the aforesaid judgment should notbe given effect to;

(b) that the Implementation Committee should bedissolved;

(c) that the Members of the Implementation Committee,namely, Mr. K.K. Venugopal, Mr. P.P. Rao and Mr.Ranjit Kumar, learned Senior Advocates should beexpelled from primary membership of theAssociation;

(d) that the members who were not eligible should beentitled to vote, notwithstanding the judgmentdelivered in B.D. Kaushik's case (supra); or

(e) that anybody's resignation should be accepted.

22. Referring to Section 173(2) of the Companies Act,1956, Mr. Desai contended that as had been repeatedly heldby this Court, at any Extraordinary General Meeting, along witha notice of the meeting, a statement setting out all material factsin respect of each item of business to be transacted at themeeting, had to be annexed. In this regard, Mr. Desai referredto the decision of this Court in Claude-Lila Parulekar (Smt.)Vs. Sakal Papers (P) Ltd. & Ors. [(2005) 11 SCC 73], in whichit was categorically held that in respect of special business anexplanatory statement had to be annexed to the notice of theBoard Meeting and in the absence thereof, any decision takenin connection with such special business would be invalid. Asimilar view had earlier been expressed in Life InsuranceCorporation of India Vs. Escorts Ltd. & Ors. [(1986) 1 SCC264].

23. Mr. Desai submitted that even Mr. Dinesh Dwivedi andMr. S.P. Singh, learned Senior Advocates, had, at the very firstinstance, submitted that Resolution Nos.1 and 4 relating to thedecision not to give effect to the judgment of this Court dated


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26th September, 2011, and that all active members of SCBAwithout any classification would be eligible to vote in the annualelections, could not be defended and submitted that the samebe disregarded and treated as withdrawn. Mr. Desai urged thateven the decision to expel the three senior members of theSCBA, who had been appointed as the members of theImplementation Committee, was not only irregular, but incomplete violation of the Rules relating to expulsion of membersof the SCBA and in breach of the principles of natural justice.Mr. Desai also urged that when the aforesaid resolution wassent to the Vice-President of the SCBA on 17th January, 2012,the majority of the members of the Executive Committee by acircular resolution of even date requested him to withdraw thesame and on such request being communicated to Mr. Parekh,he withdrew his resignation on 18th January, 2012. Themeeting of the Executive Committee on 18th January, 2012,was, therefore, wholly unauthorized and all the members of theExecutive Committee were so informed by way of SMS andE-mails dated 18th January, 2012. Mr. Desai submitted that theMinutes of the meeting held on 18th January, 2012, wereunanimously recalled by the Executive Committee on 19thJanuary, 2012, in their entirety. It was also pointed out that outof the 21 members, 18 members were present in that meetingof the Executive Committee held on 19th January, 2012.

24. Mr. Desai further submitted that Rule 35 of the SCBARules and Regulations provided for the removal of a memberfrom the SCBA on receipt of a written complaint. Rule 35provides the procedure for dealing with such complaints andcategorically indicates that only if the Committee was satisfiedthat there was a prima facie case against a membercomplained against, it would direct the complaint, together withthe report of the Committee or Sub-Committee, to be placedbefore a General Meeting of the Association and afford themember concerned a reasonable opportunity of being heardin person.

25. Mr. Desai submitted that certain subsequentdevelopments are also required to be taken note of and, inparticular, a requisition notice dated 23rd March, 2012, signedby 2/3rd of the Members of the SCBA, many of whom weresignatories to the General Body Meeting resolution dated 16thJanuary, 2012, requiring the Executive Committee to initiate theprocess of election and to publish the list of voters on or before17th April, 2012, failing which the Members would call aGeneral Body Meeting and pass a resolution of "NoConfidence" against the Executive Committee. Mr. Desaisubmitted that the requisition was considered by the ExecutiveCommittee of the SCBA and in its meeting of 11th April, 2012,it was resolved that since the matter had been heard by thisCourt and judgment had been reserved on 4th April, 2012, therequisition notice dated 23rd March, 2012, should be placedbefore this Court with an application seeking proper directions.

26. Mr. Desai submitted that yet another requisition noticedated 18th April, 2012, was received on 20th April, 2012,purported to have been signed by 252 advocates, calling uponthe members of the Executive Committee to convene a GeneralBody Meeting on 25th April, 2012, failing which therequisitionists would hold a General Body Meeting on that dayand pass a resolution of 'No Confidence' and also fix the dateof holding of the elections of the SCBA in the month of May,2012.

27. Mr. Desai submitted that the manner in which theSpecial General Meeting was held on 16th January, 2012, washighly contumacious and, therefore, void, and was liable to bedeclared as such. Furthermore, the subsequent noticesreceived for holding Requisition Meetings containing a demandfor finalization of the Voters' List, was completely contrary tothe directions given in the judgment dated 26th September,2011, particularly, when an illegal resolution was purportedlyadopted expelling the three members of the ImplementationCommittee from the primary membership of the SCBA.

SUPREME COURT REPORTS [2012] 4 S.C.R.SUPREME COURT BAR ASSOCIATION & ORS. v.B.D. KAUSHIK [ALTAMAS KABIR, J.]

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28. Mr. Harish N. Salve, learned Senior Advocate, whoappeared for the Supreme Court Advocate-on-RecordAssociation, submitted that as far as the maintainability ofInterlocutory Application No.1 of 2012 is concerned, there couldnot be any doubt that the directions issued under Article 142of the Constitution are binding upon all, unless they are recalledor set aside in a manner known to law. Mr. Salve submitted thatany attempt to defy the directions would empower this Courtwith jurisdiction to take appropriate action for compellingcompliance, including by way of contempt. Mr. Salve submittedthat the application had been made in furtherance of thejudgment dated 26th September, 2011, and the underlyingobject of the application was to uphold the majesty of this Courtand to ensure that the directions were duly implemented in thespirit in which they were given. Mr. Salve submitted that sincethe resolutions said to have been adopted by the General Bodyof the Association on 16th January, 2012, were in defiance ofthe directions issued by this Court, this Court would always havejurisdiction to deal with such violation or to give further directionsfor effective implementation thereof.

29. Mr. Salve submitted that the Respondents hadthemselves accepted that Resolution No.1 was in defiance ofthe judgment of this Court. As a result, the other Resolutionswere a fall-out of Resolution No.1 and could not, therefore, beaccepted. Referring to Resolution No.5 relating to Mr. P.H.Parekh's resignation, Mr. Salve submitted that the same wasnot part of the agenda for the meeting held on 16th January,2012. Mr. Salve submitted that the minutes of the meetings heldon 16th and 18th January, 2012, lacked credence andacceptability on account of the circumstances in which theywere adopted.

30. On the question of whether the ImplementationCommittee acted contrary to the judgment dated 26thSeptember, 2011, Mr. Salve submitted that the ImplementationCommittee acted in keeping with the guidelines in Vinay

Balchandra Joshi's case (supra) as was directed by this Courtand the object of the directions given in the judgment dated 26thSeptember, 2011, was to make a list of those who regularlypractise in the Supreme Court, as they alone would have votingrights in the matter of elections of the Office Bearers of theSupreme Court Bar Association in terms of the judgment. Suchtask had to be performed by the Committee within a given timeand whatever steps that were taken by the ImplementationCommittee were in the light of such directions.

31. Mr. Salve submitted that given the manner in which thepurported Resolutions were adopted in the meetings said tohave been held on 16th and 18th January, 2012, the same wereliable to be declared as non est in law. Mr. Salve furthersubmitted that a direction should be given to the ImplementationCommittee to continue with the work of finalizing the Voters'List, as per the directions given in the judgment dated 26thSeptember, 2012, on a war footing and to publish the Voters'List as early as possible, so that the subsequent steps couldbe taken for conducting the elections of the Office Bearers ofSCBA expeditiously.

32. Appearing on behalf of some of the members of theSCBA, Mr. Dinesh Dwivedi, learned Senior Advocate, firstlysubmitted that Interlocutory Application No.1 filed in Civil AppealNo.3401 of 2003, was not maintainable, either under Order 47of the Supreme Court Rules, 1966, or under Order 13 Rule 3thereof. Furthermore, since the judgment dated 26thSeptember, 2011, was not under challenge, even the provisionsof Order 40 of the Supreme Court Rules were not applicableto the application. Mr. Dwivedi, however, accepted the fact thatResolution Nos.1 and 4, which, according to him, had beenadopted at the Special General Body Meeting of the SCBAheld on 16th January, 2012, could not be supported and hewas not, therefore, pressing the same.

33. Mr. Dwivedi urged that once the judgment had beendelivered, the Court became functus officio and any further


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proceeding in relation to the disposed of matter could be onlyby way of the provisions for review, both under the Code of CivilProcedure, as also under Order 47 of the Supreme Court Rules,1966. Reiterating his earlier submissions, Mr. Dinesh Dwivedisubmitted that the judgment dated 26th September, 2011, hadattained finality and could not be modified or altered in anymanner. In support of his aforesaid submissions, Mr. Dwivedifirstly referred to and relied upon the decision of this Court inDurgesh Sharma Vs. Jayshree [(2008) 9 SCC 648], wherein,as a general principle, it was held that the inherent powersvested in a Court, could not be invoked when there werespecific provisions in law in that regard. The decisions in A.R.Antulay Vs. R.S. Nayak & Anr. [(1988) 2 SCC 602]; UnionCarbide Corporation Vs. Union of India [(1991) 4 SCC 584]and Supreme Court Bar Association Vs. Union of India & Anr.[(1998) 4 SCC 409], were also referred to, wherein, it had, interalia, been held that Article 142 of the Constitution empoweringthe Supreme Court to pass a decree or to make such order,as is necessary for doing complete justice in any case ormatter pending before it, cannot be invoked as a matter ofcourse. It was urged that a lis would have to be pending beforethe Supreme Court in order to invoke jurisdiction under Article142 of the Constitution. Mr. Dwivedi urged that in the presentcase, since the appeals themselves had been disposed of,there was no pending lis which would allow the invocation ofthe extraordinary powers vested in the Supreme Court underArticle 142 of the Constitution.

34. Mr. Dwivedi submitted that in an application of thisnature, the extraordinary powers vested in the Supreme Courtunder Article 142 of the Constitution could not be invoked toallow the prayers made and the same being entirelymisconceived, were liable to be rejected.

35. Representing the Supreme Court AdvocatesAssociation (Non-AOR), Mr. S.P. Singh, learned SeniorAdvocate, firstly submitted that I.A. Nos.1 and 2 of 2012, filed

on behalf of the SCAORA, were not maintainable, since theyneither fell within the ambit of a Review Petition under Article137 of the Constitution of India or Order XL of the SupremeCourt Rules, 1966. It was also urged that SCAORA was not anecessary party and the application filed by it was in grossabuse of the process of the Court. Mr. Singh submitted thatnone of the rights of any of the members of SCAORA havebeen affected by the Resolutions adopted by the GoverningBody of the SCBA on 16th January, 2012 and, if at all anyclarification was required, the members of the ImplementationCommittee could have come and obtained directions from theCourt.

36. Mr. Singh submitted that the main intention of therequisition meeting was to bring to the notice of the ExecutiveCommittee of the SCBA various irregularities committed by theImplementation Committee which needed to be rectified. It wassubmitted that what had transpired at the meeting of theGeneral Body of SCBA on 16th January, 2012, was a reflectionof the mood of the members of the SCBA, who were of the viewthat the Executive Committee of the SCBA was trying to stallthe elections which were required to be conducted within themonth of May, 2012. Mr. Singh reiterated the submissions madeby Mr. Dwivedi and submitted that since the General Body ofthe SCBA had accepted the resignation of Mr. Parekh givenvoluntarily, the subsequent meeting of the Executive Committeeheld in his absence could not be faulted, since even the Vice-President of the Association refused to preside over themeeting.

37. Mr. Singh also urged that the ImplementationCommittee had deviated from the directions given in thejudgment passed by this Court on 26th September, 2011, andthe questionnaire issued by it contained various anomalies andexcluded even Senior Advocates practising in this Court butliving outside Delhi, such as in Noida and Gurgaon, from beingeligible to vote.


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38. Apart from the above, the names of various Advocatesand Advocates-on-Record had been wrongly shown in the listwhich was also bound to create confusion. For example, thename of Shri M.C. Bhandare, the present Governor of Orissaand the name of a sitting Judge of the Madras High Court, havebeen included in the list, which clearly went to show that theImplementation Committee had not applied its mind to thepreparation of the Voters' List. Mr. Singh also urged that theconsideration of valid members who were eligible to vote wasto be considered by the SCBA which meant the General Bodyand not the Executive Committee alone. Accordingly, even theappointment of Mr. K.K. Venugopal, Mr. P.P. Rao and Mr. RanjitKumar, Senior Advocates, as members of the ImplementationCommittee, was irregular and unlawful and any decision takenby the Committee must be held to be void.

39. Mr. Singh submitted that various mal-practices wereresorted to by the persons who have been at the helm of affairsof SCBA, by throwing lavish parties and using other means toattract votes at the time of election to the Executive Committeeof the Association. Mr. Singh submitted that far from protectingthe interests of the members of the Bar, some of the presentmembers of the Executive Committee were more concernedabout their own aggrandizement to the detriment of the interestsof the members of the Bar. Mr. Singh submitted that theResolutions adopted by the General Body Meeting of theSCBA at the meeting held on 16th January, 2012 and thesubsequent meeting of the Executive Committee held on 18thJanuary, 2012, had been legally adopted and could not beinterfered with, especially in a Petition which was notmaintainable.

40. Dr. Rajiv Dhawan, learned Senior Advocate, brieflyappeared for some of the members and urged that havingregard to the questionnaire published by the members of theImplementation Committee, some clarification was necessaryas to the voting rights of the members of the Association.

41. Apart from Dr. Dhawan, among others who addressedthe Court, were Mr. Ashok Arora, learned Advocate and formerHonorary Secretary of the SCBA, Mr. Pramod Swarup, SeniorExecutive Member of the SCBA, Mr. Dinesh Kumar Garg,former President of SCAORA. Each of them spoke, either insupport of the submissions made by Mr. Dinesh Dwivedi andMr. S.P. Singh or in favour of those made by Mr. Harish Salveand Mr. Ashok Desai.

42. Since Mr. Ranjit Kumar, learned Senior Advocate,besides being a member of the Implementation Committee,was also appointed as amicus curiae by this Court in the matter,we requested him to file written submissions in the matter. In abrief submission, Mr. Ranjit Kumar submitted that despite allthe apprehensions expressed by Mr. Dinesh Dwivedi and Mr.S.P. Singh, that the rights of the practising lawyers in theSupreme Court to form an Association had been curtailed orthat the provisions of the Societies Registration Act were beingviolated by the Implementation Committee, none of theaforesaid rights of the members of the SCBA had beencurtailed in any manner. Mr. Ranjit Kumar submitted that all thatthe judgment dated 26th September, 2011 in B.D. Kaushik'scase had done was to regulate the right to vote and for thatpurpose the Implementation Committee was appointed tooversee the same. The membership of the members of SCBAwas not affected in any way on account of such regulations.

43. From the facts as narrated hereinabove, one thing isclear that in view of the order of interim injunction passed inthe two suits filed by Mr. B.K. Kaushik and Mr. A.K. Manchandarestraining the SCBA from implementing its Resolution dated18th February, 2003, amending Rule 18 of the Rules andRegulations, till the final disposal of both the suits, the twoappeals were filed by SCBA through its Honorary Secretary,Mr. Ashok Arora, and Ms. Sunita B. Rao as Coordinator of theImplementation Committee. When the two appeals were takenup for hearing, one of the major issues which was canvassed


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was that in connection with the holding of elections to theExecutive Committee of the SCBA, one of the methodsresorted to for the purpose of ensuring a candidate's successin the election was to enroll a large number of members to votefor a particular candidate. The same had given rise to a lot ofdiscussion and deliberation which ultimately resulted in theamendment of Rule 18 regarding the eligibility of suchmembers to contest and vote at any election. It was alsoproposed that a member who exercised his right to vote in anyHigh Court or District Court, Advocates' Association or BarAssociation, would not be eligible to contest for any post of theSCBA or to cast his vote at the elections. It was also proposedthat every member before casting his vote would, in aprescribed form, give a declaration that he had not voted in anyother election of advocates in the High Court/District Court BarAssociation. Any false declaration would invite automaticsuspension of the member from the membership of the SCBAfor a period of three years. The requisition dated 10th January,2003, was placed for consideration at a Special General Bodymeeting of the SCBA on 18th February, 2003, and theamendment was adopted by a majority of 85% of the memberspresent and voting. Thereafter, at a further meeting of theExecutive Committee convened on 3rd March, 2003, it wasresolved to hold election of the Office Bearers/ExecutiveMembers for the next session and for the constitution of theElection Committee. It was further resolved to hold elections on25th April, 2003. Despite an attempt by some of the membersto stall the proceedings, in the meeting of 10th March, 2003, itwas resolved to constitute an Implementation Committee toimplement the Resolution on "One Bar One Vote" which hadbeen adopted at the General Body Meeting on 18th February,2003.

44. As indicated hereinbefore, the challenge to theResolution dated 18th February, 2003, in the two suits filed byMr. B.K. Kaushik and Mr. A.K. Manchanda resulted in the

appeals being preferred in this Court by the SCBA through itsHonorary Secretary, Mr. Ashok Arora.

45. The matter was, thereafter, considered in detail by theHon'ble Judges who took up the appeals for hearing anddirected that it was necessary to identify the regular practitionersfor the purpose of establishing the eligibility of the memberswho would be entitled to vote in the elections and, accordingly,the Hon'ble Judges directed that for the said purpose the bestcourse would be to adopt the methodology set out in VinayBalchandra Joshi's case (supra), and, thereafter, it would beopen to the Office Bearers of the SCBA or a Small Committee,which may be appointed by the SCBA, consisting of threeSenior Advocates, to collect information and to prepare a listof regular members practising in this Court and anotherseparate list of members not regularly practising in this Courtand a third list of temporary members of the SCBA. Afterplacing the list on the SCBA website and inviting objections,the Committee could then take a final decision which would befinal and binding on the members of the SCBA, and, thereafterthe final list of regular practitioners of the Supreme Court wouldbe displayed by the SCBA.

46. Once such directions had been given in the judgmentdisposing of the two civil appeals filed by the SCBA throughMr. Ashok Arora, the members of the SCBA were bound bythe directions contained therein and the said directions had tobe obeyed, however aggrieved a member of the SCBA mightbe. The agenda for the meeting of the General Body which wasconvened on 16th January, 2012, to consider the implicationsof the judgment in B.D. Kaushik's case, did not permit themembers to consider any other agenda for which notice hadnot been given, whatever may have been the mood of themembers present at the meeting. If any member felt aggrievedby the judgment delivered on 26th September, 2011, he couldhave taken recourse to other lawful means available to himunder the law. The Resolutions adopted at the General Body


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Meeting on 16th January, 2012, and, thereafter, on 18thJanuary, 2012, were not only an affront to the majesty and dignityof the Supreme Court, but were outright contumacious. It ishighly regrettable that the members of the Supreme Court BarAssociation. which is the leading Bar Association in the countryand whose members are expected to provide leadership andexample to other Bar Associations of the country and to act inaid of the judgments of the Courts, should have resorted to aResolution not to abide by the judgment and to even act indefiance thereof by resolving that all members of the BarAssociation would be entitled to vote in the elections. Although,Mr. Dinesh Dwivedi did concede that the second and fourthResolutions adopted at the meeting of 16th January, 2012,should not be taken into consideration, the attempt to justify theconduct of the members of the SCBA at its meeting held on16th January, 2012, cannot be supported. Mr. Ram Jethmalani,learned Senior Advocate, who was present at the meetingsubmitted in no uncertain terms that he had not chaired theGeneral Body Meeting convened on 16th January, 2012, andwas not a party to the Resolutions which had been adopted atsuch meeting. On the other hand, Mr. Jethmalani submitted thathe had cautioned the Members not to act in an unruly mannerand to allow the proceedings to be conducted in a lawful andfree manner and to allow each member, who had a grievance,including Mr. Parekh, to express his views and then to adoptany Resolution that the members felt was needed to be adoptedin the light of the agenda of the meeting.

47. We cannot help but notice that although the GeneralBody Meeting had been convened to consider the implicationsof the judgment dated 26th September, 2011, what transpiredlater is a complete departure therefrom. The members of theSCBA present at the meeting were bent upon their ownagendas, which were directed against the three seniormembers of the Bar, who had been appointed as members ofthe Implementation Committee, together with the President. Inour view, this was not a method which should have been

resorted to for the said purpose. The meeting degenerated intoa chaotic situation in which various things were done, whichwere not in accordance with the provisions of the Rules andRegulations of the SCBA, and were against the normal rulesof decorum and cannot be supported, despite attempts madeto do so by Mr. Dwivedi and Mr. Singh. The manner in whichthe three members of the Implementation Committee whosenames had been referred to by the Hon'ble Judges in thejudgment dated 26th September, 2011, were treated, speaksvolumes of the manner in which the Hon'ble Members of theSCBA conducted themselves. If any member is aggrieved bythe actions of any other member and seeks his removal fromthe membership of the SCBA, the rules provide the manner inwhich the same is to be done and certainly not arbitrarily. It isno doubt true, that some of the members were aggrieved bythe methodology adopted by the Implementation Committee forpreparing the list of eligible voters for the election, but the samewas done pursuant to the directions given by this Court in itsjudgment dated 26th September, 2011. If the members wereaggrieved by the questionnaire which was promulgated, nothingprevented them from approaching this Court and asking formodification of the contents thereof. We are, therefore, unableto accept the manner in which the purported General BodyMeeting of the SCBA was conducted on 16th January, 2012,and the Resolutions adopted therein, some of which themembers themselves were unwilling to support, as well as thesame resolutions purportedly adopted by the ExecutiveCommittee of the SCBA on 18th January, 2012.

48. At this stage, it will also be necessary for us to dealwith the question of maintainability of I.A. Nos.1 and 2 raisedboth by Mr. Dinesh Dwivedi and by Mr. S.P. Singh. Their maincontention is that once the judgment has been delivered by theCourt, the Court becomes functus officio and in the absenceof any pending lis, this Court could not have entertained thesaid two applications.


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49. We are unable to accept the said submission madeby Mr. Dwivedi and Mr. Singh, since the need to implement thedirections contained in the judgment does not cease upon thejudgment being delivered. In order to enforce its orders anddirections, the Supreme Court can take recourse to the powersvested in it under Article 142 of the Constitution to do completejustice to the parties. In such cases, the lis does not cease andthe expression "matter pending before it" mentioned in Article142 of the Constitution, would include matters in which ordersof the Supreme Court were yet to be implemented, whenparticularly such orders were necessary for doing completejustice to the parties to the proceedings. To take any other viewwould result in rendering the orders of the Supreme Courtmeaningless. In this regard, reference may be made to theConstitution Bench decision of this Court in Supreme CourtBar Association Vs. Union of India & Anr. [(1998) 4 SCC 409],referred to hereinbefore, wherein the question before the Benchwas the power of the Supreme Court to punish for contempt ofitself under Article 129 read with Article 142 of the Constitution.While considering the same and holding that the power vestedin the Supreme Court under Article 142 should not be used tosupplant substantive law applicable to a case, being curativein nature, their Lordships also observed that the plenary powersof this Court under Article 142 of the Constitution are inherentin the Court and are complementary to those powers which arespecifically conferred on the Court by various statutes, thoughare not limited by those statutes. This Court held that thesepowers also exist independent of the statutes with a view todoing complete justice between the parties. This power existsas a separate and independent basis of jurisdiction, apart fromthe statutes, and stands upon the foundation for preventinginjustice in the process of litigation and to do complete justicebetween the parties. This Court further observed that thisplenary jurisdiction is thus the residual source of power whichthis Court may draw upon as necessary, whenever it is just andequitable to do so and, in particular, to ensure the observanceof the due process of law, to do complete justice between the

parties, while administering justice according to law. In the eventthe parties do not or refuse to abide by its decision, theSupreme Court would have no option, but to take recourse tothe provisions of Article 129 of the Constitution or under theprovisions of the Contempt of Courts Act, 1971.

50. When a judgment has been delivered by this Court, itis the obligation of all citizens to act in aid thereof and to obeythe decision and the directions contained therein, in view of theprovisions of Article 141 of the Constitution, until and unless thesame are modified or recalled. In the said background, eachof the Resolutions said to have been adopted at the purportedmeeting of the General Body of the SCBA on 16th January,2012, do not muster scrutiny and must be held to be in violationof Article 141 of the Constitution and cannot, therefore, becountenanced. Apart from the fact that the agenda for themeeting did not include the matters in respect whereof theresolutions have been adopted, the resolutions themselves,being in flagrant violation of the judgment delivered by this Courton 26th September, 2011, have to be set aside. It is the dutyof all the members of the SCBA to abide by and to give effectto the judgments of this Court and not to act in derogationthereof. The purported resolution expelling the three seniormembers of the Implementation Committee, appointed underthe directions of this Court, from the primary membership of theAssociation, speaks volumes as to the illegality thereof and thedeliberate and willful attempt on the part of the members, whoare alleged to have passed such a resolution to over-reach theorders of this Court. The same is sufficient ground to set asidethe resolutions purportedly adopted at the meeting held on 16thJanuary, 2012, notwithstanding the technical argumentsadvanced by Mr. Dwivedi and Mr. Singh.

51. Since the members of the Bar are involved, we do notwish to add anything further, except to express the hope that infuture this kind of unruly and undignified behaviour will not berepeated. Even if the members of the SCBA have anygrievance against the judgment delivered on 26th September,


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2011, they have to obey the same in the scheme of judicialdiscipline.

52. Accordingly, I.A. No.1 of 2012 in Civil Appeal Nos.3401and 3402 of 2003 is allowed. All the Resolutions purported tohave been adopted in the General Body Meeting of the SCBAheld on 16th January, 2012, and the meeting of the ExecutiveCommittee are held to be invalid and are set aside.Consequently, the composition of the Office Bearers of theSCBA prior to the adoption of the alleged resolutions of 16thJanuary, 2012, stand restored. The alleged resolution expellingthe three senior members of the SCBA constituting theImplementation Committee appointed under the directions ofthis Court, is set aside. The Implementation Committee shall,therefore, continue with the work assigned to it for identificationof the members of the SCBA eligible to vote in the elections interms of the directions given in the judgment dated 26thSeptember, 2011. However, if any member of the SCBA isaggrieved by the methodology adopted by the ImplementationCommittee for identification of such eligible members, he/shemay make a representation to the Executive Committee of theSCBA within a fortnight from date and if such a representationor representations is or are received within the specified period,the Executive Committee of the SCBA will look into suchobjections and take a decision thereupon and, if necessary, toapply to the Court, before further steps are taken by theImplementation Committee in regard to identification ofmembers eligible to vote at the elections. For a period of twoweeks, the Implementation Committee shall not take any furthersteps in the matter, and shall, thereafter, resume the work ofidentification of members of the SCBA eligible to vote on theinstructions that may be given by the Executive Committee ofthe SCBA in this regard. The process of identifying themembers of the SCBA eligible to vote in the elections forselection of the members of the Executive Committee must becompleted within four weeks from the date of individualobjections received, if any, are decided finally. Thereafter, the

SCBA shall set the dates for the election schedule, includingpublication of the list of members of the SCBA eligible to votein the elections, so that the elections can be held once the finallist is approved and published.

53. We expect all the members of the SCBA to cooperatewith the Implementation Committee and the ExecutiveCommittee of the SCBA to complete the publication of the listof members of the SCBA eligible to vote in the elections withinthe time specified, and, thereafter, to cooperate in theconducting of the elections for the election of the Office Bearersof the SCBA.

54. I.A. No.1 of 2012 in Civil Appeal Nos.3401 and 3402of 2003 is thus disposed of. Let copies of this order be madeavailable to the President of the SCBA and the members ofthe Implementation Committee for immediate compliance. Acopy of the operative portion of this judgment may also be putup on the web-site and Notice Board of the SCBA for generalinformation of all of its members. All connected IAs are alsodisposed of by this order.

55. Having regard to the observations made hereinabove,the Contempt Petition No.45 of 2012, filed in the civil appealsby Dr. Parvin Kumar Mutreja, Advocate, and two others, is alsodisposed of by virtue of this order.

R.P. Matters disposed of.


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276[2012] 4 S.C.R. 275

CHHANGA SINGH AND ANR.v.

UNION OF INDIA AND ANR.(Civil Appeal No. 4322 of 2012)

MAY 08, 2012

[DR. B.S. CHAUHAN & JAGDISH SINGH KHEHAR, JJ.]

Land Acquisition Act, 1894 – Interest on solatium –Entitlement to – Reference Court awarded solatium asprovided under the Act – But did not award interest on theamount of solatium – Claim by appellants-landowners forinterest on solatium during execution proceedings –Tenability of – Held: Tenable – Respondents directed to makepayment of interest on solatium as per the law laid down inGurpreet Singh case.

Gurpreet Singh v. Union of India (2006) 8 SCC 457:2006 (7) Suppl. SCR 422 – followed.

Land Acquisition Officer and Assistant Commissioner &Anr. v. Shivappa Mallappa Jigalur & Ors. (2010) 12 SCC 387;2010 (7) SCR 833; Nadirsha Shapurji Patel (dead) by Lrs. &Ors. v. Deputy Collector & Land Acquisition Officer & Anr.(2010) 13 SCC 234: 2010 (15) SCR 516 and Iyasamy & Anr.v. Special Tahsildar, Land Acquisition (2010) 10 SCC 464:2010 (12) SCR 489 – relied on.

Sunder v. Union of India (2001) 7 SCC 211: 2001 (3)Suppl. SCR 176 – referred to.

Case Law Reference:

2001 (3) Suppl. SCR 176 referred to Para 3, 6

2006 (7) Suppl. SCR 422 followed Para 6

2010 (7) SCR 833 relied on Para 7




From the Judgment & Order dated 10.9.2008 of the HighCourt of Delhi at New Delhi in Civil Misc. Main Petition bearingCivil Misc. (Main) No. 196 of 2007.

Naresh Kaushik, Sanjeev Kumar Bhardwaj, Aditi Gupta,Lalita Kaushik for the Appellant.

A. Sharan, Vishnu B. Saharya, Viresh B. Saharya (forSaharya & Co.), Rekha Pandey, Asha G. Nair, B.V. BalramDas, Sadashiv Reddy, Sushma Suri for the Respondent.

The Order of the Court was delivered

O R D E R

1. Leave granted.

2. The controversy in this appeal lies in a very narrowcompass. The sole issue involved herein is as to whether theappellants are entitled for interest over the amount of solatiumgranted to them.

3. Admitted facts necessary to adjudicate upon thecontroversy in this appeal are that:

I. The land of the appellants stood notified underSection 4 of the Land acquisition Act, 1894(hereinafter being referred to as ‘the Act”) on 30thOctober, 1963. In respect of the said land,Declaration under Section 6 of the Act was madeon 16th January, 1969.

II. Compensation was awarded under Section 11 ofthe Act on 17th September, 1986 assessing the275


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277 278CHHANGA SINGH AND ANR. v. UNION OF INDIAAND ANR.

market value of the land @ Rs.4350 per bigha.Being aggrieved, the appellants made anapplication for reference under Section 18 of theAct, and the Reference Court vide award dated IstJune, 2001 assessed the market value of the [email protected],750/- per bigha and awarded the solatiumas provided under the Act. However, interest wasnot awarded on the amount of solatium and itrestricted only to the enhanced amount ofcompensation.

III. The appellants filed the execution petition on 3rdSeptember, 2001.

IV. It was during the pendency of the executionproceedings, this Court decided the matter inSunder v. Union of India, (2001) 7 SCC 211 on19th September, 2001 explaining that persons-interested like the appellants are also entitled forinterest on amount of solatium.

4. So far as this case is concerned, the respondentsmade the payment as per the award of the Reference Courtdated Ist June, 2001 on 15th April, 2004 partly. The appellantsfiled an application on 6th May, 2004 for claiming the balanceamount including the interest on solatium. The Execution Courtrejected the said application vide order dated 22nd November,2006 which was challenged unsuccessfully before the HighCourt by the appellants as the High Court rejected their claimfor the said relief vide impugned judgment and order dated 10thSeptember, 2008.

Hence, this appeal.

5. We have heard learned counsel for the parties and gonethrough various judgments.

6. However, learned counsel for the appellants have

placed a very heavy reliance on the judgment of this Court inGurpreet Singh v. Union of India (2006) 8 SCC 457, whereinthe legal position in this regard has been explained as under:

“54. One other question also was sought to be raised andanswered by this Bench though not referred to it.Considering that the question arises in various casespending in courts all over the country, we permitted thecounsel to address us on that question. That question iswhether in the light of the decision in Sunder, the awardee/decree-holder would be entitled to claim interest onsolatium in execution though it is not specifically grantedby the decree. It is well settled that an execution courtcannot go behind the decree. If, therefore, the claim forinterest on solatium had been made and the same hasbeen negatived either expressly or by necessaryimplication by the judgment or decree of the ReferenceCourt or of the appellate court, the execution court will havenecessarily to reject the claim for interest on solatiumbased on Sunder on the ground that the execution courtcannot go behind the decree. But if the award of theReference Court or that of the appellate court does notspecifically refer to the question of interest on solatium orin cases where claim had not been made and rejectedeither expressly or impliedly by the Reference Court or theappellate court, and merely interest on compensation isawarded, then it would be open to the execution court toapply the ratio of Sunder and say that the compensationawarded includes solatium and in such an event intereston the amount could be directed to be deposited inexecution. Otherwise, not. We also clarify that such intereston solatium can be claimed only in pending executions andnot in closed executions and the execution court will beentitled to permit its recovery from the date of the judgmentin Sunder (19-9-2001) and not for any prior period. Wealso clarify that this will not entail any reappropriation orfresh appropriation by the decree-holder. This we have

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indicated by way of clarification also in exercise of ourpower under Articles 141 and 142 of the Constitution ofIndia with a view to avoid multiplicity of litigation on thisquestion.”

While deciding the said case, this Court has consideredand explained the judgment in Sunder (Supra).

7. The view taken by the Constitution Bench hasconsistently been re-iterated and followed by this Court as isevident from the judgments in Land Acquisition Officer andAssistant Commissioner & Anr. v. Shivappa Mallappa Jigalur& Ors. (2010) 12 SCC 387; Nadirsha Shapurji Patel (dead)by Lrs. & Ors. v. Deputy Collector & Land Acquisition Officer& Anr. (2010) 13 SCC 234; and Iyasamy & Anr. v. SpecialTahsildar, Land Acquisition (2010) 10 SCC 464.

8. In view of the above, the submissions of the appellantsare worth acceptance. The appeal is accordingly allowed. Therespondents are directed to make the payment of interest onthe solatium as per the law laid down in Gurpreet Singh (Supra)within a period of three months from today.

B.B.B. Appeal allowed.

M/S. A.B.N.A. AND ORS.v.

THE MANAGING DIRECTOR, M/S. U.P.S.I.D.C. LIMITED,KANPUR & ANR.

(SLP (C) Nos. 16116-16117 of 2010)

MAY 08, 2012

[A.K. PATNAIK AND SWATANTER KUMAR, JJ.]

Monopolies and Restrictive Trade Practices Act,1969 –s. 13(2) – Allotment of plot – Possession not given – Allottee’scomplaint to MRTP Commission – During pendency ofcomplaint, interim application seeking physical possessionof the plot – Commission by order dated 13.9.2007 passingdirection to handover possession to the allottee – Reviewapplication by the opposite party – The Commission recalledthe order dated 13.9.2007 whereby it had directed to handoverthe possession – Review application filed by the allotteedismissed – In SLP, plea of the allottee that the order dated13.9.2007 could not have been recalled being a consent orderand that review application was barred by limitation – Held:There is no infirmity in the order of the Commission wherebyit recalled the direction to handover possession to allottee onthe ground that the direction could be considered at the stageof final adjudication – The order dated 13.9.2007 was not aconsent order – The order dated 13.9.2007 being an interimorder could have been modified or revoked – Commissionhas power u/s. 13 (2) to amend or revoke any order at anytime hence it is not barred by limitation – Petition dismissed.

Ghaziabad Development Authority v. Ved PrakashAggarwal (2008) 7SCC 686: 2008 (8) SCR 676; Kiran Singhand Ors. v. Chaman Paswan and Ors. AIR 1954 SC 340: 1955SCR 117 – referred to.

[2012] 4 S.C.R. 280

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Case Law Reference:


1955 SCR 117 Referred to. Para 4

CIVIL APPELLATE JURISDICTION : SLP (Civil) No.16116-16117 of 2010.

From the Judgment & Order dated 04.03.2009 of theM.R.T.P.C. New Delhi, in RA-16 of 2007 and order dated05.01.2010 of the Competition Appellate Tribunal, New Delhiin RA-06 of 2009, in UTPE-119 of 2000.

Petitioner-In-Person.

Aarti Upadhyay, Rakesh Uttamchandra Upadhyay for theRespondents.

The Order of the Court was delivered

A.K. PATNAIK, J. 1. These are petitions under Article 136of the Constitution for leave to appeal against the order dated04.03.2009 of the Monopolies and Restrictive Trade PracticesCommission, New Delhi, (for short ‘the MRTP Commission’)in Review Application No.16 of 2007 and the order dated05.01.2010 of the Competition Appellate Tribunal, New Delhi,in Review Application No.06 of 2009.

2. The facts very briefly are that the respondents publishedan advertisement in the Hindustan Times, New Delhi invitingapplications from entrepreneurs for allotment of industrial landin Greater NOIDA on payment of 10% of the cost of allottedland. In response to the advertisement, the petitioners appliedfor a plot and on 05.03.1994 a plot of 800 square metres inSite-C was allotted. The petitioners paid 10% of the cost of theplot on 23.03.1994. However, physical possession of the plotwas not given to the petitioners on the ground that thepetitioners had not paid all the dues for the plot. The petitionersthen filed a complaint UTPE No.119 of 2000 before the MRTPCommission and after notice to the respondents the complaint

was heard from time to time. While the complaint was pending,petitioners filed I.A. No.18 of 2004 before the MRTPCommission to take possession of the allotted plot. On13.09.2007, the MRTP Commission passed an order directingthat the respondent shall handover possession of the allottedplot within next two weeks to the complainant and as regardsthe balance amount, if any due, the respondents shall submit adetailed chart giving the dates on which the subsequentinstallments were due and the amount payable on each duedate. By the order dated 13.09.2007, the MRTP Commissionalso directed the petitioners to furnish a fresh SSI certificateto the respondents and directed that the matter be listed on01.11.2007 for further directions. Instead of handing overpossession of the allotted plot to the petitioners, therespondents filed Review Application No.16 of 2007 on18.12.2007 and by the impugned order dated 04.03.2009 theMRTP Commission allowed the Review Application andrecalled the order dated 13.09.2007 insofar as it directed therespondents to handover possession of the plot to thepetitioners. Aggrieved, the petitioners filed Review ApplicationNo.06 of 2009 before the Competition Appellate Tribunal andby the impugned order dated 05.01.2010, the CompetitionAppellate Tribunal dismissed the Review Application of thepetitioners.

3. The petitioner No.3, who appeared in-person andargued on behalf of the petitioners, submitted that the orderdated 13.09.2007 of the MRTP Commission directing therespondents to handover physical possession of the allotted plotto the petitioners was a consent order as it was passed on theconsent of the two advocates appearing for the respondents,namely, Mr. Shakti Singh Dhakray and Mr. D.K. Sharma. Hesubmitted that the order dated 13.09.2007 of the MRTPCommission being a consent order, the same could not havebeen reviewed by the MRTP Commission and on this groundthe impugned order dated 04.03.2009 of the MRTPCommission recalling the order dated 13.09.2007 in Review


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Application No.16 of 2007 is illegal and is liable to be set aside.He further submitted that Review Application No.16 of 2007was filed before the MRTP Commission by the respondents on18.12.2007 more than thirty days period prescribed for filingof the Review Application. He submitted that by the timeReview Application No.16 of 2007 was filed, the petitioners hadfiled contempt petition for violation of the order dated18.12.2007 as well as a petition for executing the order dated18.12.2007 before the MRTP Commission. He submitted thatthe MRTP Commission should not have entertained the ReviewApplication after such long delay. He finally submitted that thestand taken by the respondents in Review Application No.16of 2007 was that the MRTP Commission had no jurisdiction todirect the respondents to handover possession of the plot tothe petitioners but there are decisions of this Court which makeit clear that the MRTP Commission has the power to evendirect handing over possession to the complainant.

4. Learned counsel for the respondents, on the other hand,submitted that the order dated 13.09.2007 of the MRTPCommission was an interim order and the MRTP Commissionhas rightly held in the impugned order dated 04.03.2009 that itcould not have directed the respondents by an interim order tohandover possession of the plot to the petitioners as this wasthe final relief claimed by the petitioners in the complaint beforethe MRTP Commission. Relying on the decision of this Courtin Ghaziabad Development Authority v. Ved PrakashAggarwal [(2008) 7 SCC 686], he submitted that the MRTPCommission has no power to direct handing over possessionof the plot to the complainant and it is only the Civil Court whichcould while granting a decree of specific enforcement of thecontract direct the defendants to handover possession to theplaintiffs. He submitted that the order dated 13.09.2007 passedby the MRTP Commission directing handing over possessionof the plot to the complainant is thus without jurisdiction. Hesubmitted that this Court in Kiran Singh and Others vs.Chaman Paswan and others (AIR 1954 SC 340) has held that

an order without jurisdiction is a nullity and can be challengedin collateral proceedings. In reply to the submission on behalfof the petitioners that Review Application No. 16 of 2007 wasfiled beyond 30 days and belatedly, he submitted that underSection 13(2) of the MRTP Act, the MRTP Commission hasthe power to revoke any order passed by it “at any time”.

5. For deciding the contention raised on behalf of thepetitioners that the order dated 13.09.2007 of the MRTPCommission was a consent order, we must look at the orderdated 13.09.2007 of the MRTP Commission, which is quotedhereinbelow:

“We have heard the arguments for some time of theparties. The parties are at issue regarding the balanceamount payable by the complainant to the respondenttowards balance installments or interest thereon. The othercontroversy is regarding the formalities namely certificateof SSI Registration and a NOC from Pollution ControlDepartment of the State. Earlier the complainant hadsubmitted a provisional SSI certificate which is alreadyexpired.

Complainant now undertakes to furnish the fresh SSIcertificate to the respondent positively within one month.Respondent shall handover the possession within next twoweeks thereafter to the complainant. As regards thebalance amount if any due, the respondents shall submita detailed chart giving the dates at which the subsequentinstallments were due and amount payable on each duedate.

It has been pointed out by the learned counsel for therespondent that the complainant should hand over thesedocuments to Mr. Dinesh Jain, Legal Adviser of UPSIDCat Surajpur Office with intimation to the counsel for therespondent who will ensure that the possession isdelivered to the complainant within next two weeks.

The SSI certificate earlier submitted by the complainant


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was provisional and has already expired. Therefore, anissuance of that certificate by the concerned authority willnot stand in the way of their issuing a fresh SSI certificate.The General Manager, District Industry Centre, GreaterNOIDA is directed to issue the SSI certificate at the earliestafter compliance of the necessary formalities. A copy ofthe order be given “dasti” to the complainant.

List on 1st November, 2007 for further directions.

Sd./- (Hon’ble J. Sri O.P. Dwivedi, Chairman) & (Sri D.C.Gupta, Member)”

On a reading of the order of the order dated 13.09.2007, wedo not find that the directions in the said order to therespondents to handover the possession of the plot to thepetitioners was based on the consent of the learned Advocatesappearing for the respondents and this is what has been heldby the MRTP Commission also in the impugned order dated04.03.2009. Thus, the contention of the petitioners that theorder dated 13.09.207 of the MRTP Commission was aconsent order is misconceived.

6. It is not disputed by the petitioners that ReviewApplication No. 16 of 2007 was entertained by the MRTPCommission under sub-section (2) of Section 13 of the MRTPAct. Sub-section (2) of Section 13 of the MRTP Act is quotedhereinbelow:

“13(2) Any order made by the Commission may beamended or revoked at any time in the manner in which itwas made.”

The language of sub-section (2) of Section 13 makes it clearthat the MRTP Commission may amend or revoke any orderin the manner in which it was made “at any time”. Theexpression “at any time” would mean that no limitation has beenprescribed by the legislature for the MRTP Commission toamend or revoke an order passed by it. Hence, the argumenton behalf of the petitioners that the MRTP Commission could

not have entertained the Review Application for recalling theorder dated 13.09.2007 beyond the period of 30 days has nofoundation in law. Moreover, the order dated 13.09.2007 of theMRTP Commission on its plain reading was only an interimorder and the MRTP Commission could modify or revoke theinterim order directing the respondents to handover physicalpossession of the plot to the petitioners if it thought that such adirection could only be considered at the time of finally decidingthe complaint. We therefore do not find any infirmity in the orderdated 04.03.2009 of the MRTP Commission recalling thedirection to handover physical possession of the allotted plotto the petitioner saying that this direction can be consideredat the stage of final adjudication of the complaint.

7. On a perusal of the impugned order dated 04.03.2009,however, we find that although the respondents cited thejudgment of this Court in Ghaziabad Development Authorityv. Ved Prakash Aggarwal (supra) and contended before theMRTP Commission that the MRTP Commission had noauthority to order handing over of possession and that thejurisdiction was only with the Civil Court to order specificperformance of the contract, the MRTP Commission hasobserved that this contention cannot be dealt with while passingthe interim order and can only be decided at the time of finaladjudication of the complaint. Hence, we are not called uponto decide the question whether the MRTP Commission haspower to direct handing over the possession of the plot to thecomplainant and this question can be decided by the MRTPCommission at the stage of final adjudication of the complaint.

8. In the result, we do not find any merit in these SpecialLeave Petitions and accordingly we decline to grant specialleave to the petitioners to appeal against the order dated04.03.2009 of the MRTP Commission and the order dated05.01.2010 of the Competition Appellate Tribunal. The SpecialLeave Petitions are dismissed with no order as to costs.

K.K.T. Special Leave Petitions dismissed.

Documents

[2012] 4 S.C.R. 1 2 SUPREME COURT REPORTS [2012] 4 S.C.R ... · liabilities of the contractor in connection with discharge of his obligations, one will have to refer to clause 6 of